MANILA, March 6 – Philippine conglomerate San Miguel Corp is close to a deal to sell 60 per cent of its banking unit to Malaysia’s second-largest lender CIMB Group Holdings Bhd, with the two agreeing on a final price, the chairman of Bank of Commerce said today.
“I think it’s nearing completion; it’s almost there,” Jose Pardo said. “It looks like they have agreed (on a price) already, but it hasn’t been presented to the board yet.”
“From what I hear, they want the maximum (stake) allowed, which is 60 per cent,” he said.
Pardo said it was now up to the bank’s shareholders to seal the deal.
“I think the final say will be from the shareholders,” he said. “I hope in March at least we can put closure to the negotiations, it would do well for the institution.”
CIMB would be buying a portion of the San Miguel group’s stake in the bank totalling 76 per cent and some shares from minority shareholders, said a source with knowledge of the deal who was not authorised to speak to the media.
After the deal, San Miguel’s holding in unlisted Bank of Commerce will fall to 30 per cent, while minority shareholders will be left with 9-10 per cent.
In recent years, San Miguel has slowly accumulated shares in the medium-sized lender through property arm San Miguel Properties Inc after its entry in 2007. Its SMC Retirement Fund unit also holds shares in the lender.
In 2010, San Miguel Properties bought an additional 20,383,210 common shares in Bank of Commerce for 3.56 billion pesos (RM251.26 million), or 175 pesos per share.
Last year, it forged a deal to buy 7.2 per cent of the outstanding capital stock of Bank of Commerce for 1.5 billion pesos.
At the end of the third quarter, Bank of Commerce had capital stock of 18.5 billion pesos and total assets valued at 96.5 billion pesos.
In January, CIMB Chief Executive Nazir Razak said he expected to complete talks to buy a stake in Bank of Commerce in the first quarter as the group expanded its presence in Southeast Asia. – Reuters/themalaysianinsider