By Honey Madrilejos-Reyes
Reporter
THE election of the five nominees of the SM Group to the board of Equitable PCI Bank (EPCIB), Inc. is expected to revive talks of a potential merger between the bank and the Sy-controlled Banco De Oro Universal Bank (BDO).
And with the Romualdez camp now out of the EPCIB board, industry observers say it has become a lot easier for the Sy group to pursue the merger. A merged bank, if it materializes, could overtake Bank of the Philippine Islands (BPI) and become the second largest bank in terms of assets next to Metropolitan Bank and Trust Co.
The SM Group is currently the single biggest shareholder in EPCIB with a stake of 31 percent.
Elected to the EPCIB board from the SM faction were Teresita Sy-Coson, Edmundo L. Tan, Josefina N. Tan, Exequiel P. Villacorta Jr. and Antonio Henson. The rest of the 15-man board are Rene J. Buenaventura, Nazario S. Cabuquit Jr., Corazon S. de la Paz, Fulgencio S. Factoran Jr. Winston F. Garcia, Ma. Luz C. Generoso, Ramon J. Jabar, Reynaldo Palmiery, Peter D. Garrucho Jr. (independent director) and Jesus G. Tirona (independent director).
De la Paz and Buenaventura retained their posts as chairman and president of the bank, respectively, while Sy-Coson was reappointed as vice chairman and chairman of the bank’s executive committee.
Ferdinand Martin Romualdez, formerly the bank’s vice chairman, and brother Benjamin Philip Romualdez were nominated but were not reelected. The Romualdezes, through Trans Middle East Equities Inc. (TMEQ), own a 7.13-percent stake (51.82 million shares) in Equitable PCI. However, a ruling by antigraft court Sandiganbayan prevented them from voting their shares, which are deemed by the court as disputed.
“I cannot comment because there is a court case pending,” Martin Romualdez said in a text message to BusinessMirror.
The court said that the in question were part of “ill-gotten wealth” acquired by former President Ferdinand Marcos and his so-called cronies. Ferdinand Martin Romualdez’s father is the brother of Imelda Marcos, the then-president’s wife.
On May 17, TMEQ filed for a temporary restraining order with the Court of Appeals to prevent the SM Group from sitting on EPCIB’s board.
In a 20-page petition, TMEQ said the nominees of the SM group were not qualified as directors under the General Banking Act and the Securities Regulation Code.
“They [SM nominees] are covered by the disqualification of BDO [Banco de Oro Universal Bank] for conflict of interest,” TMEQ said.
Meanwhile, Garcia, president of the Government Service and Insurance System (GSIS), was abroad when the annual stockholders meet of EPCIB was held Tuesday.
Garcia, who is also opposed to the EPCIB-BDO merger, learned of his reelection to the board through a phone call made by one of his subordinates.
Renewal of BDO offer
AN industry source said even if the SM group now has five board seats in EPCIB, it is not an assurance that a merger can now be railroaded.
“At the end of the day, whether or not they [SM Group] have the votes, it is hard to push for something especially if it doesn’t make sense. A merger proposal should merit an approval. It is not something that you can force,” the source said.
BDO publicly offered in January to absorb EPCIB, by way of merger, offering a share swap at the exchange rate of 1.6 BDO shares for every EPCIB share.
At the time it was offered, the proposal would translate to P56 worth of BDO share for every EPCIB share, even as the prevailing market price of Equitable
PCI shares were already hovering from P63 to P65 per share.
The offer, however, has already lapsed and BDO has not made any renewal since.
EPCIB shares on Wednesday fell P11, or 16 percent, to P60. BDO shares were unchanged at P37.
Equitable PCI president Rene Buenaventura on Tuesday said the lender’s profit may rise by at least 10 percent this year, compared with a 12.5-percent increase in 2005. With Bloomberg
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