By JAMES A. LOYOLA
Billionaire Enrique K. Razon Jr., through Prime Metroline Holdings, Inc., is undertaking a ₱15-billion tender offer for the shares of Manila Water Company (MWC)held by minority shareholders after gaining control over the water concessionaire.
In a disclosure to the Philippine Stock Exchange, MWC said Prime Metroline has announced its intention to make a mandatory tender offer for the shares of Manila Water at an offer price of ₱13.00 per share.
MWC has a total of 2.06 billion outstanding shares with a free float level of 55.89 percent or about 1.15 billion shares.
Abacus Securities Corporation noted that this is because minority shareholders should be afforded an exit mechanism should there be a change in control.
However, Abacus pointed out that “this is moot and academic since MWC has already climbed well past the tender offer price of ₱13.00.” As of this writing, MWC was trading at ₱13.40 per share from ₱14.92 the previous day.
This comes after Ayala Corporation executed and agreement ceding control over Manila Water to new strategic partner Razon.
Ayala said that this is in relation to the acquisition of a 25 percent stake in Manila Water by Prime Metroline through Trident Waterthat it will incorporate for the transaction.
“Please be informed that as part of the shareholder agreement to be executed among Ayala Corporation, Ayala’s wholly owned subsidiary Philwater Holdings Company (Philwater),
and Trident Water, Ayala’s Executive Committee has approved the grant of proxy rights by Philwater to Trident Water over such number of preferred shares to enable the latter to achieve 51 percent voting interest in Manila Water,” Ayala said.
Philwater owns four billion of preferred shares in Manila Water, representing 65.95 percent of voting shares in the Company. Upon the grant of proxy rights to Trident Water, Ayala’s effective voting interest in Manila Water will be whittled down to 31.6 percent.
The shareholders’ agreement will become effective after the closing of the subscription agreement, which will occur after certain conditions are met, including required lenders’ consent and regulatory approvals.
“This arrangement aims to strategically rationalize the economic and voting stakes between Ayala and Trident Water as strategic partners in Manila Water,” said Ayala.
Prime Metroline had acquired 820 million MWC common shares at ₱13 per share or a total of ₱10.66 billion.