Tender Offer set for ETON, TOL, FMIC, CMT prior to delisting

Less than two months before the deadline set by the Philippine Stock Exchange (PSE) for publicly traded companies to comply with the minimum public ownership rule, several firms are opting for a delisting instead and are currently in the process of making a tender offer.

A Tender Offer is an invitation to the public, specifically minority shareholders, to surrender or tender their shares to the acquiring entity at a specific price during a specified time.

Several firms, including Eton Properties Philippines (ETON), Metro Pacific Tollways Corporation (TOL), First Metro Investment Corporation (FMIC), and Southeast Asia Cement Holdings (CMT), have recently announced their tender offers in preparation for a delisting of their shares starting January 2013.

PSE’s Public Float Requirement

The move is in response to the requirement set by the PSE for public companies to maintain at least 10% of its shares in the hands of the public. If companies will not comply with the minimum public ownership rule, their shares will face trading suspension during the first half of the year and eventually delisted if not complied with.

As of the end of June 2012, at least 27 publicly-traded firms have public ownership percentages below 10%. These companies can be found in this list: PSE to delist 27 firms if public float rule not met

As per the PSE rules, companies that will opt to voluntarily delist must make a public tender offer to minority shareholders and must acquire at least 95% of its total outstanding stock.

ETON Tender Offer

Eton Properties Philippines (ETON), the property arm of the Lucio Tan conglomerate, has recently announced it will voluntarily delist from the bourse and, in turn, will make a tender offer to acquire 73.8 million shares comprising 2.54% of the company’s total shares. As of end-June 2012, ETON’s public float level stood at 5.65%. The company’s tender offer price is P3.00 per share. The offer will end on December 5. ETON’s last traded price as of November 9 was P2.92.

TOL Tender Offer

The Manny Pangilinan-led company involved in developing toll roads, Metro Pacific Tollways Corp. (TOL), also recently made a tender offer to acquire all remaining shares from the public at an offer price of P6.50 per share. The company’s current public ownership percentage is only 0.15%. The tender offer will run until November 22 and the company will voluntarily delist its shares starting December 21. As of November 9 last week, TOL’s shares traded at P6.25 apiece.

FMIC Tender Offer

First Metro Investment Corp. (FMIC), the investment banking unit of Metrobank, also decided to voluntarily delist from the PSE and is in the process of acquiring the remaining 1.94% shares that are owned by minority shareholders. The tender offer runs until November 29 and the offer price is P89.00 per share. As of the last trading day last week, FMIC’s shares closed at P87.10.

CMT Tender Offer

Cement maker Southeast Asia Cement Holdings (CMT) is also making a tender offer in the form of shares conversion in order to lift the public float level of its parent company Lafarge Republic Inc. (LRI), whose public ownership percentage currently stands at 3.67%. CMT is offering its shareholders a conversion ratio of 1 LRI share for every 3.73 shares owned. This will ultimately bring LRI’s public float level to above 10%, while bringing down CMT’s public ownership at less than 1%, qualifying it for delisting. The tender offer ends on November 14. As of the closing trading day last week, LRI shares traded at P9.65 apiece while CMT shares closed at P2.39.

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