Court asked to okay sale of EPCI shares

From BusinessWorld Sy-led Banco de Oro Capital and Investment Corp. has asked the Supreme Court to junk a case that is stopping the SM group from buying the government’s stake in Equitable PCI Bank (EPCI). In a manifestation filed on Tuesday, BDO Capital said the SM group’s offer to buy state pension fund Social Security System’s (SSS) stake at P92 per share makes bidding unnecessary. The SSS intends to sell its 25.84% stake in EPCI to the SM group, but cannot do so in light of a status quo order issued by the high court two years ago. The court had stopped the SSS from selling the shares after Senator Sergio R. Osmeña III and four other legislators opposed the sale for being allegedly disadvantageous to the government. SM wanted then to buy the 187.8 million shares at P43.50 apiece, to which the SSS board had agreed. In its latest pleading, BDO Capital said the P92 offer price is even higher than the current market price, adding that the lawmakers seemed agreeable to it. "The principles and objectives of a public bidding, which imports a sale to the highest bidder, are complied with since a tender offer will elicit the best price for the shareholders," BDO Capital said. It added that the case had become moot because of this. Moreover, the SSS shares are merchandise or inventory held for sale in the regular course of business, an argument adopted by the pension fund in its manifestation filed last Oct. 30. Mr. Osmeña earlier said the high court would still have to rule on the validity of the Swiss Challenge mode of sale adopted by the pension fund two years ago. Under the scheme, BDO Capital would have been allowed to match the highest bid in a public auction. The SM Group now owns 59.73% of EPCI, and the boards of EPCI and Sy-owned Banco de Oro Universal Bank (BDO) have approved a merger that will create the country’s second-largest lender. The SM group’s tender offer expired on Sept. 29. The group has expressed its intention to acquire 100% of the outstanding common stocks of EPCI. EPCI shares closed P1 lower Thursday at P79.50, while BDO shares lost P0.50 to P44.50. SM Investments Corp. shares fell by P2.50 at P310. — Paul C.H. How/BusinessWorld