In January of this year, news broke that Mitsui, a Japanese conglomerate, expressed interest in acquiring up to 20 percent of Metro Pacific Investments Corp. (MPIC), a holding company that includes Manila Electric Company (Meralco), Metro Pacific Tollways Corp., Maynilad Water Holdings Company, Inc., and Metro Pacific Light Rail Corp. This move came as MPIC’s shares were deemed undervalued, despite the company’s efforts. Last year, PLDT faced a reputational blowup when it revealed a budget overrun that exceeded its 2020 and 2021 income combined. Although CEO Manuel V. Pangilinan survived the revelation, action needed to be taken.
Shortly after, reports emerged that Metro Pacific was considering delisting from the stock market and going private. Analysts noted that the stock was trading below the value of Meralco shares it owned, indicating that the overall price failed to increase despite share buybacks and efforts to increase shareholder value.
In late April of this year, Metro Pacific aimed to buy back 36.6 percent of the company at P4.63 per share, totaling P48.6 billion. However, an analyst stated that the tender offer price represented a significant discount to the estimated net asset value and fair value of the stock. By July, the offer had to be raised by 12 percent to P5.20 per share, amounting to P54.8 billion. Investment advisors deemed this price too low compared to the market value. However, the offer was still approved by more than 77 percent of shareholders on Aug. 8. The consortium, comprised of the First Pacific Group, GT Capital Holdings, Mitsui, and a company owned by Manuel V. Pangilinan, made the buyout official on Aug. 9, with the tender offer set to expire on Sept. 7.
During this period, GSIS, a government financial institution, increased its stake in MPIC from 3 percent to approximately 11.98 percent. This move led to speculation about whether GSIS would oppose the buyout or sell its shares to the consortium. Ultimately, GSIS announced that it would cooperate with the buyout and retain its shares.
While there are differing opinions on the buyout and GSIS’s involvement, it is evident that GSIS’s actions were intended to ensure minority shareholders received a fair price for their stock. By increasing its stake, GSIS brought the consortium closer to the required 95 percent threshold for the buyout. Additionally, GSIS has the option to sell its shares at a higher price in the future. It remains to be seen how this development will impact the overall outcome and the interests of all shareholders.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
