MANILA – Ayala Corp. said it has signed an agreement with DBS Bank Ltd. to acquire part of the common shares held by DBS in the Bank of the Philippine Islands.

Under the agreement, Ayala will purchase the BPI shares from DBS for a total of P25.6 billion. The acquisition will result in a 10.4 percent increase in Ayala’s ownership stake in BPI.

DBS has been a strategic investor in BPI since 1999 and is one of the bank’s major shareholders with a 20.3 percent effective interest.

Following the acquisition, Ayala’s effective ownership in BPI will increase from 33.6 percent to 44 percent, while DBS will retain a 9.9 percent effective ownership and will continue to be represented in the BPI board.

This partial divestment is in line with DBS’ disciplined capital management and strengthens its capital position ahead of the introduction in Singapore of Basel III in 2013.

The transaction enables DBS to maintain a meaningful exposure in BPI, which it deems to be an attractive investment, in a capital-efficient manner.

Ayala Chairman and chief executive Jaime Augusto Zobel de Ayala noted that “DBS has been and will continue to be a valuable strategic partner in the governance and management of BPI. They have been a significant part of many of the bank’s milestones and achievements for over a decade. We look forward to continuing this partnership with them in succeeding years.”

At of the end of the first semester of 2012 Ayala had over P23 billion in cash.

Ayala earlier announced that it was planning to invest around $1 billion over the next five years in green field and acquisition opportunities in the power sector as well as in transport infrastructure projects under the government’s public-private partnership program.

It also recently declared it was issuing P10 billion worth of bonds. This is the second fund-raising initiative that the company is undertaking this year after the bond offer last May 2012, which raised for the company cash proceeds of P10 billion.

As of the first half of this year BPI registered a net income of P9.4 billion, a 52 percent growth from the same period last year, driven by robust growth in net interest income and further boosted by trading gains.

The bank is reportedly on track to deliver a sustainable 15 percent return on equity moving forward.*PNA

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