Instead of preparing to divest its stake in Metro Pacific Investments Corporation (MPIC), the Government Service Insurance System (GSIS) has been buying more shares to increase its stake in the conglomerate—enough to derail the management-led tender offer and delisting plan.

In a disclosure to the Philippine Stock Exchange (PSE), MPIC said it received a letter from GSIS dated Sep. 4, 2023 informing MPIC that during the period from Aug. 23,2023 to Sept. 4,2023, GSIS purchased 2.49 billion common shares of MPIC. 

“GSIS also mentioned that as a result of these purchases, GSIS owns (3.44 billion) common shares which represents approximately 11.98 percent of the total outstanding common shares of MPIC,” the firm added.

With the significant stake in MPIC, the GSIS now has the option of getting one seat in the conglomerate’s 15-man Board of Directors while having the fate of MPIC’s tender offer and planned delisting in its hands.

Among the conditions set by the management-led consortium making a tender offer for MPIC’s public shares is that they must be able to collectively own 95 percent of the company’s outstanding shares after the tender offer.

With a 95 percent collective interest held by the significant shareholders, the firm’s public float will fall below the 10 percent minimum public float requirement of the PSE and it also become eligible for voluntary delisting from the PSE. 

However, management has floated the idea of seeking exemptive relief from the PSE for the voluntary delisting requirement of 95 percent ownership by the bidding shareholders after the tender offer.

The GSIS’ 11.98 percent stake is still considered part of the public float as shares held by funds, including government financial institutions such as the GSIS and Social Security System, are exempted from being considered non-public shares.

The management-led consortium marking a tender offer for MPIC’s public shares had upgraded the offer price by 12.3 percent to P5.20 per share from the original P4.63 per share.

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 Manuel V. Pangilinan.

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 P5.20 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.

“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. 

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.