Pepsi-Cola prompts antitrust body of Lotte acquisition offer

PEPSI-COLA Products Philippines, Inc. (PCPPI) has notified the Philippine Competition Commission (PCC) regarding the plan of majority shareholder Lotte Chilsung Beverage Co. Ltd. to increase its stake in the company.

The listed local manufacturer of the international soft drinks brand told the stock exchange yesterday it had filed a notification form to the PCC on Tuesday “as the acquired entity in the recent tender offer made by Lotte Chilsung Beverage Co., Ltd. to the shareholders of the company on 11 December 2019.”

The PCC requires that it must be notified of mergers and acquisitions reaching its threshold of P5.6 billion for the size of the party in a deal and P2.2 billion for the size of transaction.

PCPPI is currently doing a tender offer of its common shares as part of the Korean conglomerate’s plan to acquire a “significant economic interest” in the company.

Lotte is offering to buy the shares at P1.95 each, which PCPPI said in a statement on Tuesday is equivalent to a 12.27% premium over the six-month volume weighted average price (VWAP) and a 6.14% premium over the three-month VWAP of its common shares.

The tender offer period, which started on Dec. 12, is set to end at 5 p.m. today.

When PCPPI submitted its tender offer report to the stock exchange in December, it said Lotte wants to buy up to 2,134,381,838 of its common shares equivalent to 57.78% of its total issued and outstanding capital stock as of end-September.

While Lotte said it does not intend to voluntarily delist PCPPI from the Philippine Stock Exchange (PSE), an exit from the local bourse is possible if the transaction results in the shrinking of the company’s public ownership to below 10%, or the allowable minimum public float at the exchange.

In end-November, before the tender offer period started, PCPPI had an authorized capital stock of P750 million divided into five billion shares priced at P0.15 each.

PCPPI shares slipped 3.66% losing 7 centavos to close at P1.84 each on Wednesday. The company booked an attributable net income of P380.1 million in the first nine months of 2019, surging from P81.19 million in the same period the previous year. —