Singapore’s Redco withdraws Makati Subway share purchase deal

Published March 12, 2021, 2:19 AM

by Bernie Cahiles-Magkilat

Redco Transit Development Pte Ltd. (Redco) of Singapore has terminated its planned acquisition of shares in Makati City Subway Inc. (MCSI) from Philippine Infradev Holdings Inc. (PIHI) and Hong Kong Binjiang Industrial Limited (HK Binjiang).

The Philippine Competition Commission (PCC) on March 9, 2021 was informed by the parties of the withdrawal their merger notification on the Makati Subway transaction citing circumstances arising from the COVID-19 pandemic.

“The parties withdrew their notification of the transaction currently undergoing merger review, and informed the MAO that they decided not to pursue the transaction and to terminate their Share Purchase Agreement due to circumstances arising from the COVID-19 pandemic,” the PCC through its Mergers and Acquisitions Office (MAO). 

“The MAO recognizes that businesses have full discretion to decide on their strategies and operations as they see fit, within the bounds of the law. For its part, the MAO carries out its functions in a non-discriminatory manner in accordance with the statutory timelines and regulatory requirements in merger reviews, with this transaction as no exemption.”

The mergers office accommodated the parties throughout the notification process, including the conduct of multiple consultations and the grant of their several requests for extensions equivalent to 127 days, since they filed their notification with the PCC in September 2020.

As the country’s antitrust authority, the PCC is mandated to review mergers and acquisitions to ensure that they do not pose competition or monopoly concerns in the market. The MAO respects the parties’ decision to withdraw, modify, or re-file their agreements, and stands ready for future notifications on this transaction. 

Under the planned share purchase deal, HK Binjiang was to acquire a 35 percent direct equity investment in MCSI through the purchase of Philippine Infradev’s unpaid subscription rights to 15 million common shares of MCSI for a price of $30 million, payable within 10 business days from effectivity of the agreement; and subscription of 36 million primary common shares of MCSI for a total subscription price of $72 million, payable in two tranches.

The Makati Subway is expected to be completed in 2025. It would run from the Makati Central Fire Station to the University of Makati. The line would also connect the city’s central business district, Circuit City, Makati City Hall and Ospital ng Makati, as well as the Metro Rail Transit Line 3, the Pasig River ferry and the proposed Metro Manila subway.