The Securities and Exchange Commission (SEC) approved yesterday the block sale of the Bank of Nova Scotia's (Scotiabank) 40 percent stake in Solidbank Corp. to Metropolitan Bank and Trust Co. (Metrobank).
Metrobank had to request the SEC to effect the sale of Scotiabank's shares in Solidbank because of the existing suspension of block sale transactions of listed stocks.
The trading of all block sale transactions was suspended last Oct. 14 until acceptable rules on block sales are adopted and approved by the SEC. Block sales have since then been done on a case to case basis.
Under the share purchase agreement by Metrobank and Scotiabank last April 6, the latter agreed to sell and Metrobank agreed to buy Solidbank shares at P416.66 per share or a total purchase price of P3.891 billion.
The sale involved 9,339, 143 shares of listed Solidbank. The shares are owned by the Scotiabank representing about 40 percent of the outstanding capital stock of Solidbank.
Under the terms of the agreement, the first 20 percent of Scotiabank holdings was priced at 2.4 times the book value, while the remaining 20 percent was priced at 1.2 times resulting in an average price of 1.8 times the book value.
The premium on the first 20 percent was needed to provide Metrobank with more than the minimum 67 percent holdings required to effect a merger. Payment will be 50 percent in cash and 50 percent through a share swap.
A Metrobank-Solidbank merger will give Metrobank total resources of more than $10 billion, a capital of approximately $1.2 billion and a network of 821 branches.
The closing of the sale is expected to be completed this month. The parties have to get the approval of the SEC, the Bangko Sentral ng Pilipinas and their respective boards, within 30 days.
Metrobank had taken months to convince Scotiabank to give up its stake at Solidbank.