DBS divests all remaining 9.9% stake in BPI for S$850m

Divested to GIC and Ayala Corporation.

DBS Group Holdings Ltd. announced that its wholly-owned subsidiary, DBS Bank Ltd., has agreed to divest all its remaining 9.9% stake in The Bank of the Philippine Islands (BPI) to GIC Private Limited (GIC) and Ayala Corporation (AC), for a total consideration of SGD 850 million (or PHP29.6 billion) in cash, based on an exchange rate of S$1: PHP 34.78 as at 11 November 2013.

This follows the partial divestment undertaken by DBS in October 2012, and is in line with DBS’ focus on its core markets of Singapore, Hong Kong, China, Taiwan, India and Indonesia, DBS said in a release.

DBS holds its 9.9% stake in BPI through a private joint venture company with AC and the divestment takes the form of a sale of DBS’ shares in that company, as opposed to a sale of BPI shares.

The aggregate purchase price represents a 2.93x multiple to the latest unaudited consolidated net book value per BPI share of PHP28.67 as at 30 June 2013 and a discount of approximately 10.5% to the closing price per BPI share on 8 November 2013, the last trading day prior to the date of this announcement.

The transaction will be completed in two equal tranches, the first by the end of 2013 and the second in the first quarter of 2014. The transaction will realise a net gain of approximately S$447 million over the carrying value of the investment. Except as disclosed, the transaction is not expected to have a material effect on the net tangible asset value or earnings per share of DBS for the financial year ending 31 December 2013 or 31 December 2014.

Peter Seah, Chairman of DBS, is also a director of GIC and as such has abstained from voting on all DBS board decisions in connection with this transaction.