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| Philippine National Bank (Photo credit: Wikipedia) |
While Bank of the Philippine Islands has entered an advanced stage of negotiations to acquire a controlling stake in Philippine National Bank, the prospective banking deal of the decade seems to have encountered a major stumbling block—getting the imprimatur of taipan Lucio Tan.
The “Kapitan” may have started estate planning and chosen a successor, but all major deals of course have to get his final blessing, and from what we gather, he needs further convincing.
Some speculate it has something to do with a supposed tempting counter-offer from fellow taipan Henry Sy-led Banco de Oro Unibank, which will lose its bragging right as the country’s biggest bank if and when the deal is reached.
While a Chinoy versus Castilaloy banking edition battle does not seem far-fetched, BDO has officially denied to the Philippine Stock Exchange any plan for a PNB takeover. BDO chair Teresita Sy-Coson herself also told Biz Buzz: “We did not look at it.”
This is probably because a bidding war is not a plausible angle if the stumbling block is not the price at which PNB is to be valued. Several sources close to the Lucio Tan group said it has something to do with the issue of dilution or the deal structure, which will leave the LT group with a minority stake (20 percent) in a holding firm that will own 60 percent of an enlarged BPI.
“He doesn’t want a minority stake in any business,” one source said. Another source described it as a “withdrawal syndrome”—as the emperor loses power and influence.
Instead of something like a Digitel-PLDT deal, it seems that what Kapitan would have preferred was the Philippine Airlines-San Miguel or Fortune Tobacco-Philip Morris partnership deals wherein the LT group remained as an equal partner, only without management control. But in this case, even a merged PNB-Allied Bank entity is not an equal partner to BPI, the country’s most valuable bank.
http://business.inquirer.net/94959/biz-buzz-stumbling-block-to-banking-deal-of-the-decade
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