MANILA, May 21 (Reuters) - Philippine conglomerate San Miguel Corp is willing to keep its banking arm if Malaysia’s second-largest lender, CIMB Group Holdings Bhd , walks away from a deal worth nearly $300 million for a 58 percent stake in the bank, its president said on Tuesday.
Ramon Ang, San Miguel president, told reporters that CIMB was expected to make a decision within the next week or two on whether to pursue its plan to acquire a majority of the unlisted Bank of Commerce.
“We already agreed on the price, terms, long time ago. In fact, they are already involved in the business. But, somehow, I don’t understand why it is taking a lot of time for them to close,” Ang said.
He added that “small” issues related to the bank’s IT infrastructure and property holdings were delaying closure of the deal. Foreigners are not allowed to own real estate in the Philippines.
CIMB and San Miguel signed an initial agreement a year ago that valued 58 percent of Bank of Commerce at nearly $300 million, reflecting a price-to-book ratio of 1.14 as of the end of 2011. CIMB said at that time the valuation was expected to rise to an effective ratio of about 1.3 times after the sale.
The deal would signal CIMB’s entry into the Philippines as part of its Southeast Asia push and would provide conglomerate San Miguel more funds to deploy for acquisitions and expansion.
San Miguel wants to sell the bank because it is not part of its core business strategy. Its stake in the bank is held by subsidiaries San Miguel Properties Inc and San Miguel Retirement Fund.
But Ang said the conglomerate could grow the bank on its own with the country’s strong economic growth.
“If they walk away, we have no problem keeping it,” Ang said. “It’s a good investment. If the deal pushes through, it’s okay. If it will still take time and I have an option, I’d rather keep it.”
Bank of Commerce had total assets valued at nearly 93 billion pesos at the end of 2012. (Reporting by Rosemarie Francisco; Editing by Ken Wills)