The delisting of Lopez Holdings Corp. (LPZ) from the Philippine Stock Exchange (PSE) has been shelved but operating arm First Philippine Holdings Corp. (FPH) will proceed with a tender offer meant to consolidate the Lopez group’s shares in the holding company.
However, the tender offer has been amended to target less amount of shares than previously envisioned, thereby removing the risk of Lopez falling below the minimum public ownership, Lopez and FPH disclosed to the PSE on Wednesday.
“We wanted to remove the seeming pressure that some shareholders of LPZ may have felt from the plan to delist the company. We want the market to freely decide if they want to avail themselves of the tender. It bears stressing that the tender offer price is at a significant premium to the market price right before the tender was announced and is even at the higher range of the valuation provided by the independent financial adviser, KPMG, as accredited by the exchange,” FPH president and chief operating officer Francis Giles Puno said in a statement.
From the previous intention to acquire a minimum of 908.46 million common shares equivalent to 20 percent and up to 2.069 billion common shares equivalent to 45.56 percent of total Lopez shares, the tender offer will now cover only up to a maximum of 1.57 billion common shares representing 34.5 percent of total outstanding shares.
The tender offer is still intended to commence on Jan. 22 and end on Feb. 19 this year, subject to the terms and conditions of the tender offer, as indicated in the amended tender offer report, at the same price of P3.85 per common share.
The shares will be acquired from all shareholders, excluding the shares owned by ultimate parent entity, Lopez Inc., which has agreed not to tender its common shares.
According to FPH, the reduction “will remove the risk of the company falling below the required minimum public ownership and dispense with the need for the company to pursue its petition for voluntary delisting” from the main board of the PSE.
FPH’s tender offer price represents a 25-percent premium over LPZ’s closing share price of P3.08 on Nov. 27, 2020, and a 41-percent, 43-percent and 36-percent premium over LPZ’s three-month, six-month and 12-month volume weighted average price of P2.74, P2.69 and P2.82, respectively. FPH’s tender offer price also represents a 22-percent premium over LPZ’s six-month closing high as of Nov. 27, 2020.
Earlier, the PSE informed the Lopez group that LPZ would already be covered by the new rules on voluntary delisting, which means that to pursue the delisting route, this action must be approved by at least two-thirds of the entire membership of the corporate issuer’s board, including the majority, but not less than two, of all of its independent directors. Furthermore, the number of votes cast against the delisting proposal should not be more than 10 percent of the total outstanding and listed shares of the listed company.
Based on a Dec. 12 fairness opinion issued by KPMG/R.G. Manabat & Co., the fair value of the listed common shares of LPZ ranges between P2.34 and P3.92 each as of the cutoff date at end-September. KMPG thus deemed the tender offer price “fair and reasonable” from a financial point of view as of the cutoff date. —DORIS DUMLAO-ABADILLA
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