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Stock Commentary

BPI confirms 'collaboration' with RBank after merger talks leak

Merkado Barkada
BPI confirms 'collaboration' with RBank after merger talks leak
In an acquisition, BPI would just buy RBank and take control of it, but in a merger, the two companies would form a new company together, usually with some elements from each original bank assuming governance and executive roles within the new bank.
Merkado Barkada

The news of BPI’s [BPI 90.00 0.33%] [link] potential acquisition of Robinsons Bank (RBank) from the Gokongwei Family appears to have been accidentally leaked by an article on Spot.ph.

The original article was titled, “Robinsons Bank, BPI Plan to Merge, What Does It Mean for Your Money?”, and though it has since been removed, the reaction to the article prompted  BPI to release a statement confirming that it is “in discussions” with RBank over a “potential collaboration”.

BPI is owned by Ayala Corp [AC 644.00 0.46%], and is the country’s 4th largest bank, as ranked by total assets by the BSP, with P2.36 trillion in assets.

RBank is owned by JG Summit [JGS 44.00 3.29%], with a 60% stake, and Robinsons Retail Holdings [RRHI 54.70 3.89%], with a 40% stake, and is the country’s 17th largest bank with P0.16 trillion in assets. Spot.ph is a news site owned by Summit Media, which is owned by Lisa Gokongwei-Cheng, the daughter of John Gokongwei.
 

MB BOTTOM-LINE

Assuming there’s fire to back up all this smoke, it will be interesting to see whether BPI just straight-up acquires RBank, or if this is actually going to go down as a form of merger.

In an acquisition, BPI would just buy RBank and take control of it, but in a merger, the two companies would form a new company together, usually with some elements from each original bank assuming governance and executive roles within the new bank.

What’s wild is how small RBank is in relation to BPI; RBank’s total assets amount to just 6.8% of BPI’s total assets, and BPI’s outright acquisition of RBank might not even trigger the PSE’s rule on Substantial Acquisitions because of that huge value differential.

There’s going to be more to come on this, and probably rather quickly, so I’m not going to speculate too much further on what could be happening!

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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.

BANK OF THE PHILIPPINE ISLANDS

PHILIPPINE STOCK EXCHANGE

ROBINSONS BANK CORP.

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