PLDT now owns 98% of Digitel

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[UPDATED] PLDT increased its stake in Digitel to 98% after minority shareholders of the third largest telco firm availed of the tender offer

BEHEMOTH. Giant PLDT got bigger after it acquired more shares in Digitel thru a tender offer


MANILA, Philippines [UPDATED] – Corporate giant Philippine Long Distance Co. (PLDT) increased its stake in Digital Telecommunications Phils Inc. (Digitel) to 98% after minority shareholders of the third largest telco firm availed of the tender offer.

Almost all minority shareholders of Digitel availed of the tender offer price of P1.60 per share from PLDT after the latter acquired the 51.55% Digitel stake of the Gokongwei group.

The tender offer increased the cost of buying Digitel by about P4.6 billion. PLDT and the Gokongweis has entered into a P69.2 billion share and bond deal — the biggest corporate deal in the Philippines — after the government gave its nod despite fears of a return to an industry monopoly.

In a disclosure, PLDT said it will pursue its plans to voluntarily delist Digitel from the Philippine Stock Exchange (PSE). Listed firms are required to have a minimum public ownership of 10%.

Tender offer

The mandatory tender offer rule is meant to protect minority shareholders of a listed firm when an outsider acquires 35% or more, in effect diluting the investment share of existing shareholders. It gives the minority shareholders the chance to exit the company under reasonable terms, giving them the opportunity to sell their shares at the same price as those of the majority shareholders.

Minority owners holding 2,888 million shares availed of the tender offer. This represents 94% of the shares held by the public. Before the tender offer, public ownership was at 48.45%.

The 4 minority shareholders who filed a complaint against PLDT before the Securities and Exchange Commission on January 4, days before the original deadline, also availed of the tender offer price of P1.6033.

Their demand to be offered P21.12 per share made the take up sluggish in the initial days, which started on December 7, 2011.

When the tender offer period ended on January 16, holders of 13% or 274 million Digitel shares availed of cash payment, while 87% or 2,514 million shares will be paid with PLDT common shares at a ratio of 1,559.28 Digitel to one PLDT share).

Each common share was valued at P2,500 per share and will be crossed in the PSE on January 24.  

“Following the completion of the tender offer and with the previously disclosed partial conversion of the convertible bonds held by PLDT into 4 billion Digitel shares, PLDT will own 10,165 million common shares or 98% of the enlarged capital base of Digitel,” PLDT said. –

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