Eton to buy back 73.8 M shares as it prepares for delisting

Eton Properties Philippines Inc. will buy back shares held by minority shareholders at P3 per share as it begins the process of voluntary delisting from the Philippine Stock Exchange (PSE).

In a disclosure to the PSE late Wednesday, Eton said controlling shareholder Paramount Land Equities would conduct a tender offer for the remaining 73.8 million common shares in the hands of the public, comprising 2.54 percent of the Eton’s outstanding capital. The company wants its shares removed from the roster of stocks being traded on the exchange effective Jan.2, 2013.

Paramount and its affiliate Saturn Holdings own a combined 97.46-percent equity stake in Eton. Paramount is a company wholly-owned by taipan Lucio Tan.

The tender offer will run from Nov. 7 to Dec. 5 and shall not be extended. Investors who tender their shares will be paid in full on Dec. 7 or no later than Dec.13.

The tender offer price was set at the upper range of Eton’s 30-day weighted average share price, based on the fairness opinion report prepared by KPMG.

Eton closed 5.28 percent higher Wednesday at P2.99 each share compared with its previous close of P2.84.

Eton officer-in-charge Michael G. Tan views delisting as the appropriate and best option for now for the company instead of selling shares to comply with the minimum public ownership rule of 10 percent for listed firms. He said the firm’s current market price does not reflect the full value of Eton.

Tan, however, said a stock market comeback might be possible in two or three years.

Stock transactions involving shares of errant companies that fail to meet the minimum public float requirement will be subject to a capital gains tax of five to 10 percent.

Non-compliant companies were given until the end of the year to boost their public float to 10 percent. Failure to do so would result in suspension of trading for up to six months beginning the first trading day next year.

Aside from this, companies must still pay listing fees while they are suspended.

After the lapse of the suspension period, they will automatically be delisted from the local bourse unless they have by then complied with the requirement.