Friday, May 02, 2008 PCGG won't oppose merger of PNB, Allied Bank
THE Presidential Commission on Good Government (PCGG) said it has no objection to the merger between two major banking institutions owned by business tycoon Lucio Tan adding that it will not dilute his assets, which is being chased by the government.
PCGG Commissioner for Legal Affairs Narciso Nario said such is the reason behind their decision not to challenge the merger of the Philippine National Bank (PNB) and Allied Banking Corporation.
Nario said the only time they will object to a merger by Tan is if he does it with a third party or that of a bank which is not his.
"Unless the assets are sold to a third party, then we will contest but if it merges two Tan properties we will not," he said.
The two banks said the merger will be effected through a share swap and is expected to close in the third quarter of this year.
Under the proposed terms, PNB will issue 140 shares for every Allied Bank common share and 30.73 shares for every Allied Bank preferred share. The PNB shares will be issued at P55 each.
The banks noted that the merger is subject to regulatory approvals and scheduled for shareholders' ratification on June 24.
PNB is the country's sixth-largest bank by assets and a leader in the remittance industry. Allied Bank, on the other hand, is a commercial bank whose principal business involves large corporate banking, retail banking and consumer finance focusing on the Chinese-Filipino community.
A merger between the two will give rise to the country's fourth-largest bank in terms of assets, with a combined network of 626 branches and 614 ATMs nationwide. Their combined assets amount to P388 billion.
"The merger will have a positive impact on the overall financial performance of the new bank given the complementary client base, enlarged distribution platform, strong capital position and expected merger synergies," said PNB president and chief executive officer (CEO) Omar Byron Mier.
Allied Bank president Reynaldo Maclang said the merger "will enhance our competitiveness in the banking industry and widen our reach to customers with more products and services offerings, which will help create shareholders' value."
ING Bank NV has been tapped as adviser by majority shareholders of the two banks while Swiss bank UBS was appointed financial adviser for the merger.
The long-planned merger of the two banks was given the green light after the Supreme Court (SC) in a ruling issued last year denied the government's bid to sequester Tan's shares in several companies, including Allied Bank.
The Lucio Tan Group controls 67 percent of PNB and 75 percent of Allied Bank. (AH/Sunnex)
