MANILA, Philippines - The biggest stumbling block to the acquisition of Export and Industry Bank (EIB) by Banco de Oro Unibank Inc. (BDO) has finally been hurdled.
The Philippine Deposit and Insurance Corp. (PDIC) gave yesterday the green light for the two parties to resume the transaction that started over a year ago. PDIC also approved the sale of the bank’s thrift banking arm, EIB Savings, to its corporate buyers.
In separate letters to the Philippine Stock Exchange (PSE), officials of BDO and EIB confirmed that they have received an official communication from the PDIC approving the acquisition process.
EIB was forced to seek financial assistance from the state insurance body in an attempt to rehabilitate the commercial bank. It also sold ownership stakes to foreign fund managers to raise funds.
In the middle of 2010, BDO made a bid for the struggling bank, which was approved by its stakeholders in August. However, some “technical issues” were raised by the PDIC, thus stalling the acquisition.
BDO chief executive officer Nestor V. Tan admitted that the next stages leading to the eventual acquisition would be agreements on “details and the documentation.”
“Headline financials have been approved. We still have to agree on the details and the documentation,” he said.
Both proponents of the merger process will still need to secure the approval of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP).
“The transaction is still subject to the execution of definitive agreements and documentation acceptable to the parties and PDIC and fulfillment of certain closing conditions, which include the final approval of the Monetary Board,” BDO officials said.
The acquisition will bring the total branch network of BDO to 776, or the existing 726 plus the 50 branches of EIB.