Bank of Commerce deal up in the air
(20 May 2013 – Philippines) Malaysia’s CIMB Group is acquiring a 60 percent stake in Philippine’s Bank of Commerce.
CIMB Group Holdings Bhd said negotiations to take over Bank of Commerce are in the final stages and a decision should be made within a month.
Rumours have indicated San Miguel Corporation, which owns the stake, has indicated it might scrap the deal.
Reports have said there is a chance San Miguel may yet walk away from the US$296 million (A$296 million) agreement to sell a majority stake in Bank of Commerce to CIMB.
San Miguel confirmed earlier comments by its President, Ramon Ang, that the deal was encountering problems and that Ang may decide in about a week whether to pull out.
A stake sale will allow San Miguel to exit the banking business and expand growth beyond traditional food and drinks.
San Miguel has expanded into airlines, oil and electricity and is in talks to invest in an energy venture through a US$5 billion equity investment, according to Ang.
CIMB agreed in May 2012 to buy a 60 percent stake in Bank of Commerce from San Miguel and other shareholders, helping it expand into Southeast Asia.
The delay is being caused by legal problems concerning San Miguel's real estate operations and has nothing to do with valuation or asset quality.
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