MANILA, Philippines – Controlling shareholders of Manny Pangilinan’s Metro Pacific Investments Corporation (MPIC) is set to bring the diversified conglomerate private through a P49-billion tender offer.

On Thursday, April 27, MPIC’s controlling shareholders, which comprise Metro Pacific Holdings, GT Capital Holdings, Mit-Pacific Infrastructure Holdings, and MIG Holdings, will buy out minority shareholders owning a combined 36.6% stake at P4.63 per share.

First Pacific Company Limited, MPIC’s parent listed in Hong Kong, said that the transaction brings “opportunity to better align strategy and operational initiatives” that would result in an efficient and cost-effective structure.

First Pacific, owned by Indonesian tycoon Anthoni Salim, emphasized that the deal also brings in Mitsui & Co Ltd. and a Japan government-backed fund into the business.

It added that the majority shareholders conducting the tender offer “feel that the intrinsic value of [MPIC’s] core investments in infrastructure in the Philippines has not been fully reflected in its share price for some time.”

MPIC’s companies include the Manila Electric Company, Metro Pacific Tollways Corporation, Maynilad Water Services, Light Rail Manila Corporation, and Metro Pacific Health.

Valuation

The tender offer price of P4.63 per share is an 8.7% premium of MPIC’s last traded price of P4.26 and a 22% premium of its volume weighted average price for the past year. 

April Lee Tan, head of COL Financial research, tweeted that the price is significantly lower than the P6.10 per share paid by GT Capital in 2016 and COL’s estimate on its net asset value (NAV). The amount also implies that Maynilad and the toll roads business are “worthless.”

“Interesting to see the independent valuation report and fairness opinion on this,” Tan said.

Stock analysts also noted that the tender offer price is too low and advised clients not participate in this round of tender offer. Analysts expect the consortium to increase the offer should it fail to acquire enough shares to go private. – Rappler.com