CIMB Still in Talks to Buy San Miguel’s Philippine Bank StakeElffie Chew and Chong Pooi Koon
CIMB Group Holdings Bhd., Malaysia’s second-biggest lender, said it’s proceeding with discussions to acquire a stake in the Philippines’ Bank of Commerce even after seller San Miguel Corp. signaled the deal may be scrapped.
Negotiations are in the “final stages” and a decision should be made within a month, Nazir Razak, CIMB’s chief executive officer, told reporters in Kuala Lumpur today. “Everything is going smoothly.”
San Miguel may walk away from the 12.2 billion-peso ($296 million) agreement to sell a majority stake in the bank to CIMB, the Philippines’ largest company said in a stock exchange filing yesterday. The brewer confirmed earlier comments by its President Ramon Ang that the deal was encountering problems and he may decide in about a week whether to pull out.
A stake sale would help San Miguel exit the banking business and would bolster its growth beyond traditional food and drinks. The Manila-based company has expanded into airlines, oil and electricity and is in talks to invest in an energy venture through a $5 billion equity investment, Ang said May 10.
CIMB agreed in May 2012 to buy a 60 percent stake in Bank of Commerce from San Miguel and other shareholders, helping the Kuala Lumpur-based bank expand its Southeast Asian footprint.
The delay is being caused by legal problems absorbing the Philippine lender’s real estate operations and has nothing to do with valuation or asset quality, according to a Philippine Daily Inquirer report on May 13. A decision will be made soon, Ang told Bloomberg News via text message today.