LPZ exit signals ABS- CBN white flag?
Multiple layers of holding companies mean wider discount for LPZ or some of its units while streamlining may reduce discount
The Lopez group may have given up on reviving its crown jewel ABS-CBN Corp. after it has started the process for the delisting of the conglomerate’s Lopez Holdings Corp. (LPZ) from the Philippine Stock Exchange (PSE).
First Philippine Holdings Corp. (FPHC) and ABS- CBN are companies under LPZ. ABS- CBN stopped operations after it failed to renew with the House of Representatives its broadcast franchise which was granted on 30 March 1995 and expired on 4 May 2020.
Analysts, however, said the move “is a way to simplify the corporate structure. Right now, under LPZ are firms like ABS-CBN, FGEN.”
“Multiple layers of holding companies mean wider discount for LPZ or some of its units while streamlining may reduce discount,” Sun Life PH research analyst Veronica Eraña said.
The National Telecommunications Commission (NTC) issued a cease and desist order last 5 May on ABS-CBN, effectively halting its operations.
ABS- CBN filed petitions before the Supreme Court on 7 May to nullify the NTC cease and desist order.
Subsequently, the NTC, backed by Solicitor General Jose Calida, issued two alias cease and desist orders on ABS-CBN TV Plus and Sky Direct, the digital box and cable television units of ABS- CBN, respectively.
The House Committee on Legislative Franchises voted 70- 11 to deny the franchise extension of ABS- CBN, prompting the NTC to recall the frequencies assigned to the broadcast firm on 10 September.
ABS- CBN resumed broadcasting through pay- TV Kapamilya Channel 13 June and free- to- air A2Z Channel 11 ( via ZOE TV) through blocktime agreement.
Good sign for shares
LPZ, in a filing late Friday, said it received a copy of the Tender Offer Report of FPHC for a minimum of 908,459,782 issued and outstanding common shares representing approximately 20 percent of the total issued and outstanding common shares and up to a maximum of 2.07 billion shares representing approximately 45.56 percent of the total from all shareholders excluding the stocks owned by parent Lopez Inc. The offer will be made at a price of P3.85 per share.
“It is always a good sign when you see an offer for your shares with a significant premium over the market price. We will be happy for the shareholders who decide to avail of this opportunity to liquidate their investment,” LPZ president, chief operating officer and chief finance officer Salvador Tirona said.
LPZ previously said “as soon as practicable after FPH files its Tender Offer Report, it will file a petition for voluntary delisting some of its 4,628,672,611 common shares from the PSE. CHITO LOZADA