EBCII accepts SM offer to buy 10.8% stake in EPCIB

EBC Investments Inc. (EBCII) said yesterday its board has accepted the Sy family’s offer to acquire its 10.8-percent stake in Equitable PCI Bank, which should raise the shareholdings of the SM Group in the country’s third largest lender to almost 45 percent.

The move is seen as a prelude to the SM Group’s acquisition of a family’s controlling block to eventually merge EPCIB with the SM family’s own Banco de Oro.

The SM Group currently holds 34 percent of EPCIBank.

In a disclosure to the Philippine Stock Exchange, EPCIB corporate secretary Sabino Acut Jr. said the EBCII board approved the sale of its 78.81 million common shares of EPCIB to the SM family at P92 each or a total of P7.25 billion, payable over a two-year period.

The SM Group, through SM Investments Inc. (SMIC), also offered to buy out other shareholders of EPCIB at P92 per share or a total of P36.9 billion, payable as follows: 10 percent on Oct. 2, 2006; 10 percent on June 2, 2007; 10 percent on Feb. 2, 2008 and 70 percent on Oct. 2, 2008.

EPCIB said the EBCII transaction is still subject to all necessary corporate regulatory approvals.

The SM Group’s offer for all EPCIB shares held by other shareholders, including that of EBCII’s, is expected to cost them as much as P44.15 billion.

Aside from Banco de Oro, other major shareholders of EPCIB are state pension funds Social Security System and Government Service Insurance System, which own 26.6 percent and 12.7 percent, respectively; and the Romualdez family’s Trans-Middle East Philippines Equities, which hold 7.1 percent.

SMIC said its offer is in line with efforts to infuse more funds in EPCIB to help meet its capital requirements and prepare it for Basel II and new reporting standards in the banking industry.

The holding company also said it is keeping its option to merge EPCIB with another bank, if the business case for it is present, to further strengthen EPCIB’s balance sheet. Such a merger will, however, be subject to approval of EPCIB shareholders and regulators, SMIC said.

The tender offer commenced yesterday and will end on Sept. 28, 2006.

The transaction is expected to be completed on Oct. 2, 2006.

SMIC, one of the largest conglomerates in the country, is engaged in shopping mall development, retail merchandising, financial services, and real estate development and tourism.