MPIC rises after bidders increase tender offer price

SHARES in Metro Pacific Investments Corp. (MPIC) rose last week after the consortium of companies planning to take the company private increased their offered price to P5.20 per share.

Data from the Philippine Stock Exchange (PSE) showed MPIC ranking fourth in value turnover with P883.74-million worth of 178.30 million shares exchanging hands from July 3 to 7.

On July 4, the Pangilinan-led company requested a voluntary trading suspension to allow market participants to assess the recent moves of MPIC before transacting its common shares.

MPIC shares closed at P4.96 apiece on Friday, 4% higher than its June 30 close of P4.77.

Year to date, the stock has increased by 45%.

Analysts attributed the conglomerate’s price movement to the increase in tender offer price per share.

“We attribute the gap up last Wednesday to investors pricing in the updated tender offer price of P5.20. Succeeding price action was muted, as it traded a tight range between P4.94 to P5.00,” Rastine Mackie D. Mercado, research director at China Bank Securities Corp., said in an e-mail.

He said the price actions mirror investors’ pricing in the updated tender offer price and prospects of the voluntary delisting plan pushing through.

“The spread between prevailing market prices and the tender offer price reflects other considerations such as transaction fees and holding period returns,” he said.

Last week, the conglomerate pushed through with its plan to privatize the company after securing its board’s approval.

The consortium of companies that will acquire MPIC has sent a higher tender offer price of P5.20 per share, 12.3% higher than the initial offer of P4.63 apiece. 

The consortium consisted of Metro Pacific Holdings, Inc., GT Capital, Mit-Pacific Infrastructure Holdings, Inc., and MIG Holdings, Inc. which tapped Unicapital, Inc. as its new independent financial advisor.

The revised tender offer will cover outstanding common shares, aside from those owned by the consortium and qualifying common shares of MPIC’s board of directors.

The latest move from the consortium of major shareholders to make a tender offer for all the common shares of MPIC will make the company private by way of delisting voluntarily from the PSE.

Aniceto K. Pangan, equity trader at Diversified Securities, Inc., said that even with the increase in the tender offer price, MPIC is still priced lower than its recorded book value of P7.08 per share after the first quarter.

In a text message, he said market players treated the news as a mixed bag “in the sense that the long-term investors were not as welcome with the incremental increase as this is below its [previous] book value.”

For Mr. Mercado, investors would be more open to considering tendering their shares at the updated price. He pointed to the pronouncement that there will no longer be any further opportunity to adjust the price due to various constraints.

“It would be prudent to also weigh the risks for those who will continue to hold out with respect to tendering their shares, as it would be substantially harder to sell any shares once the 95% tender offer acceptance threshold is met and subsequent delisting is completed,” Mr. Mercado added.

In the first quarter, MPIC reported a 12% decrease in its attributable net income to P5 billion from P5.7 billion previously. Its operating revenues, on the other hand, rose 27% to P14.1 billion.

Mr. Pangan said MPIC should continue to grow after the approval of its toll rate increases together with its utilities. He added that its other business ventures are in expansion mode, such as renewable energy, hospitals, and logistics, which he expects to show “sustained growth going forward.”

He added that given the current climate or status of MPIC, delisting is not seen as a good move, especially in times of illiquid market status.

“A better offering price above its book value would somehow compel investors that would reflect a fair valuation,” he added.

He pegged support and resistance levels at P4.95 and P5.00 per share, respectively.

Meanwhile, Mr. Mercado said a major consideration for investors should be the risk of holding non-public shares if the delisting plan pushes through.

“Support is at P4.93 while resistance is at P5.00.”

MPIC is one of the three key Philippine units of Hong-Kong based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority share in ����ý through the Philippine Star Group, which it controls. — Abigail Marie P. Yraola