Allied Bank-PNB merger hits snag

Business World

A DELAY in the sale of shares held by Allied Banking Corp. in a US bank has held up the former’s merger with Philippine National Banking Corp., an official yesterday said.

"[The sale of Oceanic Bank shares] did not push ahead; something happened and now it is undergoing negotiations," Allied Bank corporate affairs head Gertrudes T. Bandal told BusinessWorld in a telephone interview.

"There are bidders but we have yet to finalize on whom to award the shares," she added, declining to provide more details.

In an e-mail, meanwhile, Allied Bank President Anthony Q. Chua said "matters related to the [sale of the shares and the merger] will be taken up" in a board meeting later this week.

"Details will be disclosed to the stock exchange after," he added.

Allied Bank needs to dispose of a 28% equity share in San Francisco-based Oceanic prior to the merger given restrictions imposed by US regulators.

Last July, Allied Bank’s board told the stock exchange that it had approved the sale of shares in Oceanic Holding (BVI) Ltd. to John Kim Chuy Ng, majority owner of local construction firm Cathay Metal Corp.

Mr. Chua had targetted a third quarter sale of the Oceanic stake. The merger with PNB was expected to be completed this year.

Both banks, owned by taipan Lucio C, Tan, announced plans to merge back in April 2008. Central bank approval was secured six months later.

The onset of the global financial crisis, however, pushed back implementation of the merger plan. Allied Bank also found it hard to find a buyer for its Oceanic shares.

The deal involves a P25-billion share swap wherein PNB will give Allied Bank shareholders 140 PNB shares for every Allied Bank common share and 30.73 PNB shares for every Allied Bank preferred share.

It would make PNB the fifth largest bank in the country with assets totaling P484.09 billion, after market leader Banco de Oro Unibank Inc., Metropolitan Bank & Trust Co., Bank of the Philippine Islands and Land Bank of the Philippines.

PNB shares closed at P58 apiece yesterday, up from Friday’s P55.85.