The management-led consortium planning a tender offer for the public shares of Metro Pacific Investments Corporation has upgraded the offer price by 12.3 percent to P5.20 per share from the original P4.63 per share.
The higher tender offer price is the result of a new valuation report after the Philippine Stock Exchange required the bidders to submit one made by a PSE-accredited Independent Financial Advisor (IFA).
MPIC Chairman, President and CEO Manuel V. Pangilinan
The consortium making the tender offer is composed of shareholders First Pacific Company Limited and GT Capital Holdings, Inc. together with strategic investor Mitsui & Co., Ltd. and a management investment group (MIG) led by MPIC Chairman and President Manuel V. Pangilinan.
In a disclosure to the PSE the group said it has increased the tender offer price to shareholders MPIC to buy their shares on the PSE at a “best and final” price of 5.20 pesos per share.
Under the tender offer, the bidders would spend up to approximately P54.8 billion for the remaining shares held by the minority shareholders of MPIC. The tender offer values MPIC at P149.2 billion in equity value.
“The improved price represents a premium of 37 percent over the one-year Volume Weighted Average Price (VWAP) of P3.80 per share and a premium of 57 centavos over the earlier offer price. If successful, the tender would result in MPIC’s delisting,” the consortium said.
It remains to be seen if this price is already acceptable to minority shareholders, specially fund managers. “A survey by the Fund Managers Association of the Philippines of its preferred selling price returned an average estimate of P5.75 per share,” a stock analyst said.
However, China Bank Capital Managing Director Juan Paolo Colet said the adjusted price “signals an earnest desire by the offerors to listen to the market’s clamor for a fair price."
"Faced with a choice of taking an offer that seems unlikely to be improved further or the prospect of holding a perennially undervalued stock, I think many minority shareholders will seriously consider tendering their shares," he added.
First Pacific Executive Director Christopher H. Young said “We regard this new offer as the best and final price the Bidders are able to deliver to MPIC’s minority shareholders.”
“Due to the transaction timetable, approvals, and regulatory requirements of the entire process across multiple jurisdictions, there will be no further opportunity to adjust the price,” he noted.
As a conglomerate, MPIC has historically traded at a discount to the underlying value of its assets with a one-year VWAP to April 26, 2023 of 3.80 pesos per share reflecting recent market sentiment.
“To comply with the voluntary delisting rules, a PSE-accredited IFA was appointed by the Bidders and produced a report with a valuation range of 3.37 to 5.10 pesos per MPIC common share,” the disclosure said.
It added that, “Following a period of consultation in the wake of the earlier tender offer announcement, the Bidders feel that the raised tender offer price provides an improved path to minority shareholders to exit their positions at a sizeable premium to market price.”
MPIC shareholders will vote on the delisting application at a Special Stockholders’ Meeting (“SSM”) to be held on August 8, 2023. The tender offer period is expected to begin shortly after approval is obtained and is expected to last 20 business days from the commencement date.
To comply with the voluntary delisting requirements of the PSE, the common shares to be tendered in the tender offer, together with the common shares owned by the Bidders and the qualifying common shares of MPIC’s directors, should constitute at least 95 percent of the total outstanding common capital stock of MPIC, or such percentage as the PSE may allow, to effect the voluntary delisting of MPIC from the PSE.
Considering the Bidders’ intention to delist MPIC from the PSE, they will not accept any tendered shares unless the threshold for a voluntary delisting is achieved.
MPIC said in a separate disclosure that, after receiving the Updated Notice from the bidders, a special meeting of its Board of Directors convened and, the MPIC Board, including all four independent directors, unanimously approved a resolution authorizing the filing of an application for voluntary delisting with the PSE.
During the same meeting, the MPIC Board also unanimously approved to schedule the holding of a Special Stockholders’ Meeting on August 8, 2023 with record date of July 18, 2023.