Aboitiz Equity consolidates banking business in UnionBank

MANILA, Philippines - Aboitiz Equity Ventures Inc. (AEV) is consolidating its banking business into Union Bank of the Philippines (UnionBank) through a P5.7-billion deal.

“The Board of Directors of AEV approved the proposed offer from UnionBank to purchase all of its shares in City Savings Bank Inc. (CitySavings),” the conglomerate said in a disclosure.

AEV and its subsidiary Pilmico Foods Corp. own 99.54 percent of CitySavings’ issued and outstanding capital stock.

Specifically, AEV owns 116,262 shares or 59.54 percent of CitySavings’ while animal feeds manufacturer Pilmico holds 78,109 shares or 40 percent of the thrift bank.

“The planned share acquisition is conditional upon UnionBank obtaining the necessary Monetary Board approvals from Bangko Sentral ng Pilipinas,” AEV said.

“The total acquisition value is approximately P5.7 billion,” AEV said, adding that the purchase would be paid in cash.

The purchase price would be computed at 2.5 times Sycip Gorres Velayo & Co.’s audited book value as of December 31, 2012, subject to the results of the due diligence.

“The transaction is expected to be consummated upon the issuance of the relevant regulatory approvals,” AEV said.

In March 2010, AEV increased its stake in CitySavings to almost 100 percent from 34 percent, buying out shareholders for P1.3 billion.

As a thrift bank, CitySavings is primarily engaged in offering loans to school teachers under the Education department’s Automatic Payroll Deduction System. Other products include salary loans to government and private sector employees, home mortgage and home improvement loans, as well as small business loans.

To date, AEV owns 44.82 percent of UnionBank’s total issued and outstanding capital stock and would have a resulting beneficial or attributable interest of 44.61 percent in CitySavings’ equity after UnionBank’s acquisition.

Aside from banking and animal feed manufacturing, AEV is into power generation and distribution and property development.