Security Bank: Premiere acquisition shows it's not for sale

By Maiki Oreta and Coco Alcuaz, ANC

Posted at Jun 03 2011 09:40 AM | Updated as of Jun 03 2011 07:21 PM

MANILA, Philippines - Security Bank says its P1.3 billion purchase of Premiere Bank and a joint venture with Marubeni Corporation it announced this week should put an end to occasional speculation that it’s a takeover target.

While Security Bank is one of the most profitable lenders in the country, it’s just Number 12 in terms of assets. Its name comes up when there’s news or speculation that larger banks such as Banco de Oro and Bank of the Philippine Islands are on the prowl.

Yesterday, it said it was buying 98% of Premiere Bank, a thrift bank with 38 branches in Manila and the Calabarzon area. Earlier this week, it announced it and Marubeni were forming a venture for leasing trucks, buses and construction equipment. 

"We believe this deal and our recently announced joint venture with Marubeni of Japan underscores our commitment to building our franchise and illustrates the viability of our remaining an independent player in the years ahead," Senior Vice President Carlos Borromeo said in an ABS-CBN News Channel interview.

Borromeo said it took two months to reach an agreement. Agreement was speeded up because Security had to talk to just three shareholder groups in Premiere, including New York-based Rohatyn Group, which bought a 50% stake in 2006. He said Security and Premiere had "compact" negotiating teams who had "very clear focus on the commercial terms." Security agreed to pay in cash. 

"A stock transaction was never on the table and a cash settlement was the preferred mode, a condition that security bank was well prepared to meet," Borromeo said. He said Security had no other immediate acquisition plans.  

Branches will increase 30% to 117 after the acquisition, he said.