Metro Pacific Investments Corporation (MPIC) reported that its planned voluntary delisting will now push through after the bidders have obtained enough shares from a tender offer to bring down the firm’s public float to less than five percent.

In a disclosure to the Philippine Stock Exchange (PSE), MPIC said it has received a notice from the bidders that based on the report of the Tender Offer Agent, as of Sept. 7, 2023, a total of 5.36 billion MPIC common shares have been tendered.

The tendered shares are equivalent to 18.70 percent of MPIC’s total issued and outstanding listed shares. Together with the excluded shares and the non-public shares, this is equivalent to 96.87 percent of MPIC’s total issued and outstanding listed shares.

Based on this, the bidders said that, when the tendered shares are accepted and crossed, the bidders expect MPIC’s public float to fall below 10 percent and will pave the way for MPIC’s voluntary delisting, subject to the approval requirements of the PSE.

This means that everything is going according to plan, including the entry of Japan’s Mitsui & Co. Ltd. as a new strategic shareholder—except for an unexpected twist: the entry of the Government Service Insurance System (GSIS) as a significant shareholder with rights to one board seat.

Since the tender offer was priced at P5.20 per share, this effectively put a price cap on MPIC’s publicly-traded shares at the PSE, making it easier for the GSIS to mop up large amounts of MPIC shares without fear of driving up the share price as would normally happen for large purchase orders in the open market if there is no de facto price cap.

Meanwhile, MPIC said the bidders have decided to extend the tender offer from Sept. 7 to 12:00pm of Sept. 19, 2023 to “provide the remaining MPIC shareholders, who missed the deadline on September 7, 2023, more time to fully appreciate the recent developments on the delisting of MPIC and make a decision to participate in the Tender Offer.”

There were shareholders who held off tendering their MPIC shares in the belief that the stock should have a higher value and were hoping that there were enough like-minded shareholders to keep the bidders from obtaining control of 95 percent of the company’s stock needed for its voluntary delisting.

The bidders, First Pacific Company Limited through its affiliate, Metro Pacific Holdings, Inc., GT Capital Holdings Inc., a consortium including Mitsui, and Manuel V. Pangilinan-led MIG Holdings Incorporated, said the crossing and settlement dates for the tendered hares are Sept. 26, 2023 and Sept. 28, 2023, respectively.

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 GSIS said it intends to remain a shareholder of the conglomerate even if it is delisted. Since it owns more than 10 percent of the outstanding common shares of MPIC, pursuant to the Rule on Minimum Public Ownership, its shares in MPIC are now considered as non-public shares.

MPIC said it received a letter from GSIS dated Sept. 4, 2023 informing MPIC that during the period from Aug. 23 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.