ISM Communication acquires PBCom

Posted on December 24, 2011

ONGPIN-led ISM Communications Corp. (ISM Communications) has completed the acquisition of a controlling stake in the Philippine Bank of Communications (PBCom).

In separate disclosures to the stock exchange on Friday, ISM and PBCom said: "...the transaction involving the acquisition by a group of investors led by ISM Communications Corp. of 47,094,807 common shares and 120,000,000 preferred shares of the bank at P27.88 per share from the Chung, Luy, Nubla groups was successfully transacted through the facilities of the exchange [on Friday]."

ISM now owns 97.28% of the bank’s outstanding capital stocks which it bought for P4.68 billion.

Last month, ISM Communications secured the the Monetary Board of the Bangko Sentral ng Pilipinas’ nod to acquire a majority stake in the bank.

In a separate disclosure, ISM Communications said it has secured the Securities and Exchange Commission’s approval that its acquisition of a controlling stake in "PBCom be exempted from the mandatory tender offer requirements under section 19 of the Securities Regulation Code.

"We don’t think any minority shareholder would have his shares bought at P27.88 per share given that our prevailing market price is at P80 per share," said Rodolfo Ma. A. Ponferrado, ISM Communications corporate information officer, in a phone interview yesterday.

"We will be happy to buy any stake at P27.88 if investors will offer their shares," he added.

The bank’s three major shareholders -- the Nubla and Chung families that hold a combined 58.26% stake and the Luy family with around 39% -- had been looking to dispose of a 67% stake as one of the conditions of a P7.6-billion lifeline extended by PDIC in 2004.

PBCom had started the process to sell the majority stake in the bank as early as February 2009, choosing Macquarie as financial adviser.

In June, ISM Communications took over a controlling stake in PBCom under a share sale ordered by the BSP and the state-deposit insurer Philippine Deposit Insurance Corp. (PDIC).

The Chung, Luy and Nubla families signed a memorandum of agreement with the ISM group in July covering the sale of the combined stake of the three families and the shares owned by selling investors.

On Sept. 7, PDIC confirmed the selection of the ISM Communications, Mr. Ongpin and president Eric O. Recto as PBCom’s third party strategic investor.

Had PBCom failed to sell the 67% combined majority stock, PDIC would automatically be empowered, under the financial assistance agreement signed in March 2004, to take over the sale of the block.

Profits of PBCom as of September declined by 24% to P457.968 million from P602.212 million from previous year on the back of lower trading gains made during the period.

PBCom shares closed at P80 apiece on Friday, 5.66% or P4.80 lower when they were traded last Wednesday. -- ARRG