Korean shareholder makes ₱4.16-B tender offer for PCPPI shares

Lotte Chilsung Beverage Co. Ltd. is planning to undertake a tender offer for up to ₱4.16 billion worth of Pepsi-Cola Products Philippines, Inc. (PCPPI) shares to gain majority control of the beverage firm.

In a disclosure to the Philippine Stock Exchange, PCPPI said Lotte Chilsung has published its intent to acquire up to 2.13 billion common shares of the Company through a tender offer to all shareholders other than Lotte Corporation and the members of the Board of Directors.

The target shares comprise 57.58 percent of PCPPI’s outstanding capital of 3.69 billion shares. The company has a public float of 32.78 percent.

The tender offer price has been pegged at ₱1.95 per share. Stock analysts noted that the tender offer price is at a substantial discount to the book value of PCPPI shares of ₱2.50 each but higher than its last closing price of ₱1.40 apiece.

The Securities and Exchange Commission and the PSE are crafting new rules on the valuation of stocks subject of tender offers or other modes of acquisition after complaints from minority shareholders prompted the bourse to review its existing rules.

In an earlier interview, PSE President Ramon S. Monzon said the draft rules will authorize the bourse to be the one to choose a valuation company for all those deals that needed a fairness opinion provider instead of the parties involved.

“In the proposed rule, for any deal that requires valuation from a third party company, the PSE will ask the firm to pick at least three firms acceptable to them and the exchange will pick from any of these,” he explained.

Monzon added that, “we will choose from these and we will engage them, and then they will report to us. So there will be no bias.”

This follows recent tender offers and voluntary delistings of gaming firms Melco Resorts and Entertainment (Philippines) Corporation and Travellers Internation Hotels Group Inc. where minority shareholders questioned the tender offer prices.