source: http://business.inquirer.net
This has been last week’s talk and it does have something. After reading an article in Inquirer.net I guess this upcoming merger is promising. An excerpt of the article is below from inquirer.net:
BPI inches closer to sealing deal with PNB
Ayala banking arm seen to emerge as country’s biggest
By Doris C. Dumlao
Philippine Daily Inquirer 12:27 am | Thursday, November 22nd, 2012In a game-changing move, Bank of the Philippine Islands will consolidate with Philippine National Bank, ushering in a new wave of mergers and acquisitions among local banks.
BPI and PNB voluntarily suspended trading on Wednesday at the Philippine Stock Exchange after the two confirmed an Inquirer report that their shareholders were negotiating a consolidation.
To avoid strain on its capital, BPI of the Ayala group is widely expected to use its own shares as currency when it acquires PNB, which is likewise completing a merger with Allied Banking Corp.
BPI is expected to become the controlling shareholder in the union. This will catapult the Ayala bank to the top of the local banking industry.
“We confirmed discussions with the Lucio Tan Group, and will make the appropriate disclosures in accordance with the PSE disclosure rules,” BPI told the Philippine Stock Exchange.
PNB also confirmed the discussions with the Ayala group.
While BPI and PNB went on trading suspension, shares of both Ayala Corp. (+4.9 percent) and Lucio Tan Group (+1.2 percent) surged at the stock market Wedbesday. Shares of other banking players also jumped as similar plays are expected throughout the banking industry.
As the number of players becomes less, banks become even stronger,” said Jose Vistan, head of research at AB Capital Securities. “They can demand higher valuations in terms of asset values so it had an effect on other banking issues. It will probably result in the revaluation of other banks and most probably lead to similar M&As.”
read the whole article at inquirer.net
Back then I was one of the hopefuls regarding the news of the PNB-Allied Bank merger but the slow pace has tested my patience and eventually sold my PNB holdings when I have a few profit. I never really expected the Ayala group to have talks to acquire a majority stake at PNB. As the article said the Lucio Tan group would be better off focusing on the newly reorganized Tanduay Holdings and let the Ayala group with proven track record of operating a bank business to make the most of the possible three-way merger.
The expected close of this three-way merger is by end of the year and if this materializes I guess PNB shareholders will be having a very Merry Christmas.
About the blogger
Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Learn more about Louis and his financial freedom advocacy here.
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