PSE Circular for Brokers No. 3258-99

December 22, 1999 PSE CIRCULAR FOR BROKERS NO. 3258-99 December 21, 1999 PHILIPPINE STOCK EXCHANGE, INC. 4/F Philippine Stock Exchange Center PSE Center, Exchange Road Ortigas Center, Pasig City Attention: Ms . Luisa W . Buenaventura Supervisor Disclosure Dept . Gentlemen: In reply to your fax message of December 21, 1999, regarding the news article entitled "Sale of Solidbank shares blocked" published in the December 21, 1999 issue of Today, we wish to inform you that Metrobank has not been furnished with a copy of the petition filed with the Securities and Exchange Commission and, aside from what appears in the newspapers, is not aware of the pending case with the Securities and Exchange Commission. cdlex We hope this clarifies our position. Very truly yours, (SGD.) ANTONIO V. VIRAY Senior 1st Vice President Asst. Corporate Secretary Sale of Solidbank shares blocked BANK of Nova Scotia (Scotia-bank) yesterday asked the Securities and Exchange Commission (SEC) to hold the proposed sale of Solidbank to the Metrobank Group pending a clarification on its right of first refusal on the Madrigal family's shares. Scotiabank insists that its exclusive shareholder's agreement with the Madrigals covers only their shares, but Metrobank claims that along with the Madrigals' holdings, Scotiabank must match its offer to buy out other minority stockholders. Robin Hibbard, head of Scotiabank's regional office, said in a statement that the SEC resolution was sought to resolve "differences in interpretation because we want to know exactly our options." The Canadian bank also wants the Madrigals to disclose exactly how much of their holdings they plan to unload as stipulated in their shareholder's agreement. The bank said that the Madrigals, along with the minority, agreed to sell 50 percent plus one share of Solidbank to Metrobank. The sale offer is equivalent to 11.683 million common shares. Scotiabank points out that the family owns only 38.32 percent of Solidbank. The bank wants to know exactly how many shares are being put on the auction block, since its shareholder agreement with the Madrigals calls for the latter to notify exactly how many shares it intends to offer. In its petition, Scotiabank said the Madrigals are asking in effect to "exercise its right of first refusal over a block of unidentified shares which included shares not contemplated in, and covered by, the shareholders' agreement under pain of losing its contractual right to acquire the Madrigals' shares only. cdlex The Canadian bank, a significant block with a 40 percent interest in Solidbank, said the SEC ruling is "critical" to protecting its right to acquire the shares of the Madrigals their partners for the past 11 years. To this end, the bank has filed for an injunction as well as an order for a "timely written notice to Scotiabank of (the Madrigal family's) intention to sell" and to specify exactly how many shares they intend to sell. SEC intervention may prove to be a saving grace for the bank considering that it has to match Metrobank's offer by December 27 as per an agreement reached earlier this month. LexLib