Razon eyes to buy more Manila Water shares

THE buying spree of casino and ports magnate Enrique Razon Jr. continues as he offered to acquire the remaining shares of Manila Water Co. Inc., the Ayala-led utility said on Friday.

In a disclosure, Manila Water said it received a letter from Prime Metroline Holdings Inc., Razon’s infrastructure company, to conduct a mandatory tender offer for the listed firm’s shares.

The tender offer price is set at P13 apiece, slightly lower than the company’s closing price of P13.28 each on Friday.

Under its rules on mandatory tender offers, the Securities and Exchange Commission says “any person or group of persons acting in concert, who intends to acquire 15 percent of equity securities in a public company in one or more transactions within a period of 12 months, shall file a declaration to that effect with the Commission.”

Moreover, those who intend to purchase 35 percent of the outstanding voting shares, or such outstanding voting shares sufficient to gain control of the board in a public company in more than one transactions within 12 months, shall disclose its intention and make a tender offer for the percentage sought to all holders of such securities within the said period.

At present, Manila Water’s public float level, which represents the portion of outstanding stocks made available to the public for trade, stands at 55.89 percent. The company’s market capitalization is at P30.89 billion.

The transaction comes a day after Razon obtained majority voting rights in the beleaguered water service provider.

As part of the shareholder agreement inked between Manila Water’s parent firm Ayala Corp., Ayala subsidiary Philwater Holdings Co. and Trident Water Systems, Ayala’s executive committee “approved the grant of proxy rights by Philwater to Trident Water over such number of preferred shares to enable the latter to achieve 51-percent voting interest in Manila Water.”

Philwater holds 4 billion preferred shares in Manila Water, representing 65.95 percent of voting shares in the East Zone concessionaire.

The deal materialized ahead of the government’s review of the concession agreements with Manila Water and Maynilad Water Services Inc. which President Rodrigo Duterte previously said have “onerous” provisions.

Duterte’s tirades prompted the two water companies to no longer claim the more than P10 billion awarded to them in cases they filed against the government and defer water rate hike, which was supposed to take effect last month.

Earlier, the Permanent Court of Arbitration in Singapore ordered the government to pay Manila Water P7.39 billion for incurred losses. Two years ago, the international tribunal asked the government to pay Maynilad P3.4 billion for not allowing the firm to raise rates.

Manila Water shares declined by P1.68 or 11.23 percent to close at P13.28 each on Friday.