TAN SUCCESSION PLAN MAY BE BEHIND MERGER
AMID news and rumors of the merger between Philippine National
Bank and Bank of the Philippine Islands, there is a possibility that tycoon Lucio Tan is just starting to weigh his succession options since he may have not yet identified a particular heir to his multi- billion
business empire.
AMID news and rumors of the merger between Philippine National Bank (PNB) and Bank of the Philippine Islands (BPI), there is a possibility that tycoon Lucio Tan is just starting to weigh his succession options since he may have not yet identified a particular heir to his multibillion business empire.
April Tan, head of research of brokerage COL Financial Philippines, said in an interview with reporters that the strategy of Tan to partner with the Ayala Group could be associated with his succession plans.
“It’s really more of estate planning or a succession planning because at this point there is no clear heir to [Tan’s] empire yet unlike other tycoons,” she said.
However, another analyst said in a phone interview that Tan’s plan to have PNB merged with BPI, which will give him a stake in the Ayala-controlled bank, has nothing to do with succession plans despite rumors that his sons are fighting over who would control his business empire.
The analyst added that the PNB-BPI merger could only be a strategy of Tan to broaden his presence in each of the business segments he is involved in.
“I don’t think this is an inheritance issue. Tan has been buying out stake from different businesses segments he is already involved in and I think this is just more on plans to dominate in each industry he is in,” the analyst said.
Early this month, LT Group Inc., formerly known as Tanduay Holdings Inc., announced that it fully owns four of its subsidiaries namely Fortune Tobacco Corp., Asia Brewery Inc., and Paramount Land Equities Inc., Saturn Holdings Inc.
“The acquisition of the additional shares from the above-named compa- nies will be paid from the proceeds of the five-billion share subscription that was recently approved and completed,” LT Holdings said in an earlier disclosure to the Philippine Stock Exchange.
In early October, the LT Group increased its stake in the four companies of up to 98 percent.
As for the merger between PNB and BPI, the Ayala-controlled bank said that, “other than the confirmed earlier discussions with the Lucio Tan Group, there is no other matter that would warrant disclosure as there has been no BPI Board action at this point in time.”
April Tan said on Thursday said that the merger between the PNB and BPI could prompt more consolidations among banks to maintain their rankings in the industry.
She cite the 1990 Equitable-PCI bank merger that left Metropolitan Bank and Trust Co. (Metrobank) no choice but to acquire smaller banks to maintain its number one position.
Tan added that if the PNB and BPI merger pushes through after the Tan-controlled bank is merged with Allied Bank, BPI will be the number one bank in the Philippines. The number one bank in the country is Banco de Oro Unibank, while Metrobank is at a close second place.