This Pangilinan-led Company is Set to Voluntarily Delist from PSE
While the move has been approved by the company’s board, it’s still subject to regulatory approval. In this article, we explore how this will affect stockholders and investors.
The Manny Pangilinan-led company Metro Pacific Investments Corp. (MPIC) is set to voluntarily delist from the Philippine Stock Exchange (PSE). The tender offer made to minority shareholders totals PHP 48.6 billion.
According to a report, the reason behind this move is that a consortium of the company’s major shareholders is set to buy out the minority shareholders via a tender offer. Thus, the remaining 36.6% of MPIC will be acquired by the consortium at PHP 4.63 apiece.
MPIC’s major shareholders are as follows:
- GT Capital Holdings Inc.
- Metro Pacific Holdings Inc. (MPHI)
- MIG Holdings Incorporated
- Mit-Pacific Infrastructure Holdings Inc.
The delisting was unanimously approved by the firm’s board on April 26, 2023, and was subjected to compliance with regulatory requirements. To date, the company has voluntarily suspended trading of its shares.
“We envision this transaction will release value in MPIC for the benefit of our shareholders and we look forward to working with our partners in MPIC for the long term, undistracted by the need to focus on short-term—often quarterly—goals that public ownership often imposes,” First Pacific executive director Christopher Young said.
How Major Shareholders Are Planning to Hike Up Their Stake
The report also notes that “In a separate filing, MPIC’s parent firm First Pacific Company Ltd. said it will spend some $90 million (approximately PHP 4.99 billion) to boost its stake in MPIC by as much as 3.8% through MPIH, using internal financial resources.”
On the other hand, GT Capital is likewise using internal funds in order to be able to spend $70 million (approximately PHP 3.88 billion). Doing so will increase its stake up to 20%.
“This further diversifies GT Capital’s core portfolio,” GT Capital chief financial officer Francisco Suarez Jr. explained. “Our participation aligns with our mission of creating further value for our stakeholders and contributing to nation-building.”
Why is MPIC Relevant to the Public?
For those who are wondering about MPIC and what it is known for, this Pangilinan-led company is actually a stakeholder in several well-known companies that offer the country’s basic needs.
For one thing, MPIC is the owner of 47.5% of Manila Electric Co. (Meralco) and 99.9% of Metro Pacific Tollways Corp., which operates and maintains 223 kilometers of expressways in the Philippines—including 106 kilometers of the North Luzon Expressway (NLEX), 94 kilometers of the Subic-Clark-Tarlac Expressway (SCTEX), and 14 kilometers of the Manila-Cavite Expressway (CAVITEX).
Aside from these, it also owns 52.8% of Maynilad Water Services Inc. and 20% of Metro Pacific Health Corp.
What Happens When a Company Delists from the PSE
“Publicly-listed companies” refer to companies with stocks or shares that are traded in a stock exchange. This means that the public can invest in the company by buying its shares. But for that to happen, they must meet regulatory standards set by the PSE by regularly disclosing business information to the investing public, among other criteria.
When a company delists, however, it leaves the PSE, whether by choice or otherwise.
If a company gets delisted from the PSE, it will buy back its shares from stockholders and investors at the price offered—or simply put, a tender offer. As a stockholder who has invested in the company, you have three options:
- Sell the stocks back to the company at the price they offered
- Try to sell the stocks on the stock exchange to get a better price but at the risk of missing out on the tender offer
- Hold onto your stocks after delisting
While the two are fairly straightforward, the third one can be more complicated, since your stocks will have to go through an upliftment process, where the stockbroker gives you the stocks in a certificate format. This means that you’ll stay on as a stockholder and still get the benefits, like dividends payouts.
On the other hand, you can sell your delisted stocks back to the company at their stock transfer office or find a direct buyer and negotiate with them. But even with these two options, you’ll need to pay capital gains tax on the transaction itself, as it didn’t take place in the PSE.