Metro Pacific Investments Corp. sought a trading suspension on Tuesday to allow shareholders time to consider the higher price that major shareholders have tendered for stocks of the diversified investment holding company.
The tender offer, led by major shareholders Metro Pacific Holdings Inc. and GT Capital Holdings Inc., was intended to reprivatize Metro Pacific to allow it to raise fresh capital from other sources to pursue new investments.
The revised offer price was set at P5.20, which values the target shares around P55 billion, up from the initial value of P49 billion.
Many shareholders were critical of the initial tender offer of P4.63 as this is lower than the price targets of stockbrokerages. The initial offer was a 22 percent premium to the stock’s one-year volume weighted average price of P3.80.
The consortium of bidders, which also include Japan’s Mit-Pacific Infrastructure Holdings, Inc. and MIG Holdings Inc., said the new price is the “best and final” it could make since it is 12 percent higher than the initial offer and 37 percent above the one-year volume weighted average price.
If successful, the tender would result in Metro Pacific’s delisting—a decision earlier approved by the holding company’s board but still has to be approved by shareholders. Metro Pacific Holdings and GT Capital own a combined 63 percent of Metro Pacific.
“We regard this new offer as the best and final price the Bidders are able to deliver to MPIC’s (Metro Pacific) minority shareholders,” said Christopher Young, executive director of First Pacific, parent company of Metro Pacific Holdings. “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 said the bidders have engaged Philippine Stock Exchange-accredited independent financial advisor, which arrived at a valuation range of P3.37 to P5.10 each for Metro Pacific’s common shares. As a conglomerate, Metro Pacific has historically traded at a discount to the underlying value of its assets, he added.
Young said the Bidders feel the revised tender offer price provides an improved path to minority shareholders to exit their positions at a sizeable premium to market price.
Metro Pacific shareholders will vote on the delisting application at a special stockholders’ meeting to be held in early August 2023. The tender offer will proceed after the shareholder meeting.
