While Bank of the Philippine Islands has entered an advanced stage of negotiations to acquire a controlling stake in Philippine National Bank, the prospective banking deal of the decade seems to have encountered a major stumbling block—getting the imprimatur of taipan Lucio Tan.
The “Kapitan” may have started estate planning and chosen a successor, but all major deals of course have to get his final blessing, and from what we gather, he needs further convincing.
Some speculate it has something to do with a supposed tempting counter-offer from fellow taipan Henry Sy-led Banco de Oro Unibank, which will lose its bragging right as the country’s biggest bank if and when the deal is reached.
While a Chinoy versus Castilaloy banking edition battle does not seem far-fetched, BDO has officially denied to the Philippine Stock Exchange any plan for a PNB takeover. BDO chair Teresita Sy-Coson herself also told Biz Buzz: “We did not look at it.”
This is probably because a bidding war is not a plausible angle if the stumbling block is not the price at which PNB is to be valued. Several sources close to the Lucio Tan group said it has something to do with the issue of dilution or the deal structure, which will leave the LT group with a minority stake (20 percent) in a holding firm that will own 60 percent of an enlarged BPI.
“He doesn’t want a minority stake in any business,” one source said. Another source described it as a “withdrawal syndrome”—as the emperor loses power and influence.
Instead of something like a Digitel-PLDT deal, it seems that what Kapitan would have preferred was the Philippine Airlines-San Miguel or Fortune Tobacco-Philip Morris partnership deals wherein the LT group remained as an equal partner, only without management control. But in this case, even a merged PNB-Allied Bank entity is not an equal partner to BPI, the country’s most valuable bank.
So for the deal to be sealed, it’s all up to Kapitan now.—Doris C. Dumlao
Speaking of which…
According to our sources, the would-be BPI-PNB-Allied Bank merger is not something that was hatched overnight, but was actually brewing for some time now.
Just how long? Maybe close to two years in the making, if one were to start counting from the point where a deeper relationship emerged between the Ayala and Lucio Tan groups, our source said.
Supposedly, the idea for greater collaboration between both business empires began a couple of years ago when a joint-venture agreement was struck for the construction of a new Ayala Land project near the Edsa-Shaw Boulevard intersection (under the Alveo brand). The project, which is currently being built on the former property of the Construction Development Corporation of the Philippines (CDCP) along Edsa, involves PNB, which owned the property by virtue of a dacion en pago deal with some defaulting borrowers.
It was during the groundbreaking for that project where Kapitan supposedly formed a closer relationship with the Castillan Zobel brothers, so much so that the taipan’s son, Michael, sits on the advisory board of the Ayala-controlled Globe Telecom Inc.
Only time will tell, however, if the friendship formed between both camps is strong enough to help make the BPI-PNB-Allied Bank merger finally happen.—Daxim L. Lucas
The incredible vanishing Alphard
During the recent long weekend—and after the Toyota Alphard “coincidence” was raised in this column—this lucky Cabinet secretary, instead of using his brand-new luxury vehicle, chose to park the same in a relative’s garage, according to our source.
Could it be that the coincidence that an infrastructure company, which recently bought four brand-new white Alphards, and this certain Cabinet secretary owning the same type of vehicle, is more than a just coincidence?—Daxim L. Lucas
A ‘good problem’ for J.Co
Indonesia’s J.Co Donuts and Coffee seems to be having an explosive debut year in the Philippines with some stores grappling with inventory. (Yes, it’s Indonesian, not Japanese as some first-time customers may have assumed).
Curiously, unexpectedly larger amounts of orders are “to-go” or “for takeout” rather than “for here” or “for dine-in,” as local customers say.
Long lines are often seen snaking through the J.Co counters, through in-store spaces, and sometimes even out the doors. Whether this is a long-term trend for customers who have found the right donut variants between “too sweet” and “bland,” or a short-term thing that goes as soon as the novelty wears off, remains to be seen.
For now, store managers and the franchisee of J.Co consider it a “good” problem when orders are piled and stocks are running out.
Since opening in Indonesia in 2005, J. Co has opened more than 100 branches across Asia. The franchise opened its first branch in the Philippines last March.—Riza T. Olchondra
Zuellig building wins
Drum roll please. The sparkling new Zuellig building at the corner of Makati Avenue and Paseo de Roxas won the “People’s Choice Award” in the prestigious and recently concluded MIPIM Asia Awards.
Being the first building in the Philippines to be recognized as a finalist by MIPIM, the 33-story structure is now also the first Philippine building to win the award. To earn the award, the Zuellig building bested 116 other projects from 11 countries. Some of its competitors were Hong Kong’s 50 Connaught Road Central and China’s Tianjin Global Financial Center.
Prior to its being a finalist, the Zuellig Building had already gained attention for being the first high-rise project in the Philippines awarded with a Gold pre-certification under the Leadership in Energy and Environmental Design program of the US Green Building Council.—Daxim L. Lucas
Another project, another lobby
Remember the privatization of the hydroelectric power plant at the Angat Dam that was contested by some critics before the Supreme Court?
Well, we all know that the high tribunal—already operating under the new management of Chief Justice Lourdes Sereno—upheld last month (by a vote of 15-1) the privatization process, which was won by Korea Water Resources Corp., right?
Under K-Water’s plan, it would operate the hydropower facilities in Bulacan to generate 246 megawatts—something that is crucial, given the country’s growing economy that brings with it an increasing appetite for electricity.
Here’s the thing: Biz Buzz has heard that the Korean investors, who have long persevered under the flip-flopping government policies of previous years, are now being “convinced” by a certain Cabinet secretary to back away from the project.
The project is not being scrapped, of course. But some people think that other parties are interested in the lucrative deal. Will the Koreans—with their victory having recently being upheld by the court—succumb to the pressure from an influential lobby to back out of the Angat project? This should be interesting to watch.—Daxim L. Lucas
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