An answer on Equitable PCI tomorrow?

Bids are in to buy a stake in the Philippines Equitable PCI.

By this morning the board of Equitable PCI will have received bids from those interested in acquiring a stake in the bank. The board will meet tomorrow to decide whether any of the bids make sense.

JP Morgan is advising the board on the potential for a domestic bank merger which would involve either BPI, Metrobank or Rizal Commercial Banking Corp (which is rumoured to have tied up with Sanwa and Banco Santander to make a bid). ING Barings is advising on the possibility of a foreign party taking a strategic stake. As many as seven bids are expected, both foreign and domestic.

The one complicating factor is the new Philippines takeover code which says that if a party buys more than 15% it has to make a general offer to all shareholders. This would not suit many of the strategic investors. It is thought, however, that a way round that structure exists.

The whole thing is something of a grey area, but according to one view a buyer could take 14.9% now with a promise to buy 14.9% the next year. The bank can also issue new shares (say 10% of the total stock) and sell this as a placement to the buyer apparently without triggering a general offer.

With all these complications, many analysts are still wondering whether a deal will happen.

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