Banco de Oro’s takeover offer for EPCIB still stands

Banco de Oro Universal Bank, owned by retail and shopping mall tycoon Henry Sy, is still offering to buy Equitable PCI Bank, bank president Nestor Tan said in an interview yesterday.

"The offer still stands," said Tan. "We are still willing to talk."

"Despite the lapse of the period for consideration, Banco de Oro is still open to merger talks. We have not changed our position and direction on our merger offer," Tan added.

Sy, the nation’s second-richest man according to Forbes Magazine, has been trying to buy Equitable since 2004 to merge it with Banco de Oro, to better compete with the country’s biggest banks, Metropolitan Bank & Trust Co. and Bank of the Philippine Islands. Equitable has a market value of P56.3 billion while Banco de Oro is worth P33.8 billion.

Equitable is "the most attractive" takeover target among Philippine banks, because "anybody who buys Equitable gets an instant offense in terms of higher deposits, more products and more branches," CLSA Philippines head of research Alfred Dy said in a phone interview. "There could really be other parties looking at it."

Banco de Oro and parent company SM Investments own a combined 34 percent stake in Equitable. The Sy group has offered 1.6 of its shares for every one of Equitable’s shares.

"Our offer takes into account the fundamental financial position of both banks," said Tan. "Let us not include the impact of speculation on the share prices."

Equitable, according to Tan, had not asked Banco de Oro to improve its offer.

Equitable PCI, on the other hand, told the Philippine Stock Exchage (PSE) that management is mum on the issue since there has been no official information given by the merger proponent.

"Kindly be advised that Equitable PCI Bank has not received any communication from Banco de Oro Universal Bank to the effect that the latter "has withdrawn its ‘merger of equals’ proposal to Equitable PCI Bank," it said.

Banco de Oro said it had completed the integration of the 66 branches it acquired from United Overseas Bank, bringing its network to 220 branches from 185 as of the end of last year. Banco de Oro said it will add 31 more branches this year.

Meanwhile, the offer of a still undisclosed buyer to purchase the entire shareholdings of the Sy family’s SM Group in Equitable PCI for P95 per share is a vote of confidence for the Philippine economy, according to Winston F. Garcia, president and general manager of the Government Service Insurance System (GSIS).

Garcia said the offer is good for everybody, including the GSIS and the Social Security System which together hold more than 41 percent stake in Equitable PCI Bank. – Ted Torres, Bloomberg