MANILA: Malaysia's second largest lender CIMB Group will sign a deal soon to buy 60 percent of Philippine conglomerate San Miguel Corp's unlisted banking arm, the chairman of Bank of Commerce said on Monday.
It would be the first foray by the Malaysian bank in the Philippines, further boosting its regional footprint after it bought some equities and investment banking units from Royal Bank of Scotland Group Plc elsewhere in Asia earlier this month.
The deal will also allow San Miguel, the country's most diverse conglomerate, to keep a minority stake in the unlisted bank while focusing on its new ventures such as power, mining, telecoms, infrastructure, and more recently, airlines.
San Miguel said early this month it had forged agreements to acquire an indirect stake in the country's flag carrier Philippine Airlines and its sister airline for $500 million.
"I was told it would happen shortly," Jose Pardo, told Reuters, when asked about the signing between CIMB and San Miguel, after the sale was reported by local media. He added the deal needed the approval of the central bank.
"I presume if they (CIMB) take 60 percent, they will have about eight board seats," Pardo said. Medium-sized lender Bank of Commerce has 15 board members.
Pardo said San Miguel Properties Inc and San Miguel Retirement Fund, which together hold about 76 percent of Bank of Commerce, were in negotiations with CIMB about the deal.
Some minority shareholders would also sell their stakes in the bank, a source with knowledge of the deal but who was not authorised to speak to the media told Reuters.
The deal will be presented to Bank of Commerce shareholders at a meeting on April 24.
San Miguel was little changed in early trade on Monday, slipping 0.3 percent, in step with the broader market's 0.3 percent decline. CIMB was down 0.4 percent.
CIMB's buy-in may be worth about $200 million to $250 million and could be finalised in the next few days, said a report by the Philippine Daily Inquirer.
There was no immediate comment from San Miguel on the deal.
At the end of the third quarter, Bank of Commerce had capital stock of 18.5 billion Philippine pesos ($433.5 million)and total assets valued at 96.5 billion pesos.
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