Robinsons Retail Holdings Inc. (RRHI), a member of the Gokongwei conglomerate, is set to acquire an additional 4.4 percent stake in Bank of the Philippine Islands worth almost P20 billion bringing the retail firm’s stake to 6.8 percent and the entire Gokongwei group’s shareholdings in the Ayala-owned bank to 10.4 percent once merger and acquisition is completed.
In a disclosure to the Philippine Stock Exchange, RRHI said the purchase of shares in BPI will bolster “a shared growth strategy that will generate synergistic value for the group and its partners.”
On January 5, 2023, RRHI’s Board of Directors approved the purchase of the 4.4 percent effective equity interest of Arran Investment Pte. Ltd. (an affiliate of GIC Private Limited) in BPI.
Through Redeemable Preferred Shares, GIC via Arran currently owns 21.9 percent of Liontide Holdings, Inc., which in turn has a 20.0 percent equity interest in BPI.
As part of the transaction, Arran will redeem a portion of its Preferred Shares in Liontide. The underlying BPI shares, representing 3.3 percent equity interest in BPI, will then be purchased directly by RRHI.
Simultaneously, RRHI will acquire Preferred Shares in Liontide, which are redeemable to BPI shares, representing 1.1 percent of BPI outstanding shares.
The purchase price was not disclosed. Credit Suisse served as the adviser to GIC in this transaction.
On September 30, 2022, the respective boards of directors of BPI, JG Summit Capital Services Corporation, and RRHI approved the merger of BPI and Robinsons Bank Corporation, with BPI as the surviving entity, subject to shareholder and regulatory approvals.
The merger will result in Robinsons Bank shareholders collectively holding 6 percent of the resulting outstanding capital stock of BPI (3.6 percent for JG Capital and 2.4 percent for RRHI, which represent their respective equity interest of 60 percent and 40 percent in Robinsons Bank).
Once the merger and acquisition is completed RRHI’s shares in BPI will increase to 6.8 percent and the entire Gokongwei group to 10.4 percent.
“We envision Robinsons Retail to become a leading retailer with excellent financial products for customers and suppliers alike – and the partnership with BPI simply accelerates this aspiration,” said RRHI President and CEO Robina Gokongwei-Pe.
She added that, “We expect to generate more value by combining BPI’s premium banking ecosystem with the consumer-oriented ecosystem of Robinsons Retail, complemented further by our digital businesses.”
RRHI will be able to tap into the extensive consumer customer base of BPI to cross- sell products and services while in turn giving Robinsons Retail suppliers the capability to tap into BPI’s vast financial products to help fund their working capital requirements as they expand their business.
Financially, Robinsons Retail will also receive a steady stream of dividends from one of the largest and most profitable banks in the country.
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The article was originally published in Manila Bulletin and written by James A. Loyola.
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