Banco de Oro says it is open to merger talks with Equitable

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Posted: 2:47 AM | Feb. 02, 2006

XFN-Asia

MALL tycoon Henry Sy's Banco de Oro Universal Bank is keeping the door open for Equitable PCI Bank to accept its merger proposal although its deadline for acceptance passed Tuesday, Banco de Oro president Nestor Tan said.

 

Banco de Oro and its owners also appear willing to negotiate, after Equitable PCI's major shareholders, led by the Government Service Insurance System (GSIS) strongly rejected Banco de Oro's proposal.

 

"We understand that they are still reviewing our proposal. We will still be open to discussions," Tan told XFN-Asia, after Equitable PCI issued a statement that it was still considering the merger proposal.

 

Banco de Oro, the Philippines' sixth largest bank in assets, has proposed a swap of 1.6 of its shares for every share of Equitable PCI, the third largest.

 

GSIS president Winston Garcia insists that the value of Equitable PCI shares is far higher than this proposal implies.

 

Banco de Oro's proposal offers an alternative: basing the swap ratio on the book values of both banks, to be assessed by an independent accounting firm, using International Accounting Standards.

 

The GSIS, the pension fund for government workers, owns 12.4 percent of Equitable PCI, while the private-sector workers' pension fund, the Social Security System, has about 29 percent.

 

Banco de Oro shares closed on Wednesday down 0.50 peso at 36.50, while Equitable PCI fell 1.00 to 63.00.

 

(1 dollar = 52.075 pesos)

 

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