Metro Pacific Investments Corp. (MPIC) officials pointed to the company’s share price as the main driver of the decision to delist the company.
Manuel Pangilinan, MPIC chairman, said the consortium of Metro Pacific Holdings Inc., GT Capital Holdings Inc., Mit-Pacific Infrastructure Holdings Inc. and MIG Holdings Inc. are sticking with the offer price of P4.63 per share in its tender offer that will see MPIC delisted should a substantial volume of its shares are offered by the holding public.
Pangilinan’s statement comes in response to market participants commenting about the lowballed valuation of the tender offer compared to what the market views as MPIC’s inherent value.
“A few days after the announcement of the tender offer, there were commentators who said actually the share value should be at P11.90 per share. Fine if it reaches, we’d be very happy, we’d be the first to withdraw our offer for MPIC, let the shareholders will be happy.
But the circumstances justify that,” said Pangilinan.
Pangilinan noted Manila Electric Co. (Meralco), a subsidiary of MPIC, is valued at P376.68 billion while MPIC is valued at P126.55 billion.
“You’ve all read the market’s assumptions… the value of the Meralco shares alone is way above the market cap of MPIC. Is that a secret? We never hit that,” he said.
Pangilinan said the plan to delist MPIC has been in consideration for the past two years and only built momentum early this month when MPIC joined the presidential visit to Japan.
“Things were starting to get finalized with Mitsui. And so to the extent that they’re providing about half of the total privatization requirements that gave a lot of flesh to the privatization possibility,” Pangilinan said.
Chaye Cabal-Revilla, MPIC chief finance officer, said the tender offer price was based on an independent third-party valuation study.
“We were at our buyback program for the last two to three years. And the average buyback price was about P3.73…compare that with the offer price of P4.63 (which) is higher,” she said, noting that investors opting not to tender their shares are risking the possibility of the company’s share price dropping back below P4 — resulting in a lost opportunity.
Ray Espinosa, MPIC director, said being a private firm will not be a loss to MPIC, which cannot maximize its ability to tap the capital market by leveraging on its share price.
Revilla said even if MPIC is delisted, the operating units could tap the stock market by listing on their own, citing Maynilad Water Services.
MPIC on Wednesday reported a profit of P5 billion for the first quarter of the year, down from P6.67 billion last year. Revenues rose to P14.14 billion from P11.13 billion previously.
The company posted a core profit of P4.3 billion, up 38 percent from P3.1 billion a year earlier.
“Improved financial and operating results at MPIC’s holdings delivered a 30 percent increase in contribution from operations, mainly driven by the strong performance of the power generation business and higher billed volumes from the water concession,” the company said.
