WE READ newspapers because we want to be informed. Sometimes, we have an uneasy feeling that we are being manipulated but normally we do not mind too much because we believe that the manipulations are fairly harmless. The showbiz sections of our newspapers are replete with such examples.
Slightly higher up the scale are the business sections. The manipulations are somewhat more serious and many evoke some irritation.
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Many moons ago, we read that Citibank had decided to disengage from the Philippines. There were reports that the Bank of the Philippine Islands (BPI) was interested in acquiring Citibank’s assets. I was slightly surprised since my limited experience with these financial institutions was that their corporate cultures were markedly different. I did not hear any more about this possible acquisition.
Last week, in a respected national broadsheet, I read “Unionbank bags Citi’s $1 billion retail business in the Philippines”. I was interested. However, I was mildly annoyed when the article said that the deal is expected to be signed in the next two to three weeks”. Expected? I do not read newspapers to be confused about the content. There is not enough time. Is Unionbank buying Citibank’s Philippine operation or not?
Unionbank introduced a cautionary note: “any transaction in relation to the acquisition of Citi’s consumer banking business in the Philippines would be subject to, among other things, the completion of satisfactory due diligence, the negotiation and execution of definitive transaction documents, satisfaction of the conditions contained therein and the approval by the regulators of the transaction”.
Well said.
Due diligence is not a trivial matter. When BPI’s potential acquisition of Citibank was mooted, my first thoughts were about the outcome of due diligence enquiries. Specifically, there was much anecdotal evidence which suggested that not all was well with Citi’s corporate culture. There were customers who had serious disputes which challenged the veracity of Citi’s credit card transactions.
Due diligence may also have had a significant impact on a potential acquisition by Prudential (UK) in 2010 of AIA’s Asian operations. Initially, Prudential offered $35.5 billion but after due diligence the offer was reduced to $30.82 billion. Wow!
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It is important for those of us who do not want unnecessary ambiguity to creep into newspaper articles, that the print media does not include misleading statements.
We do not have the time to waste./PN
