SEC orders deferral of Liberty tender offer
THE SECURITIES and Exchange Commission has directed the telecommunications duopoly that now controls Liberty Telecoms Holdings Inc. to defer the closing of a tender offering for Liberty and to submit more information about the controversial reassignment of frequencies that had depressed the tender offer price.
The tender offer priced at P2.20 per share was supposed to expire by Sept. 21 at 5 p.m. covering up to 165.88 million common shares representing 12.82 percent of the issued and outstanding common stock of the telecom company formerly owned by conglomerate San Miguel.
In a letter dated Sept. 16 but transmitted only on Monday, the SEC Markets and Securities Regulation Department (MRSD) directed Vega Telecom Inc. – now jointly owned by PLDT Inc. and Globe Telecom – to defer the tender offer conclusion, submit a new timeline relative to the tender offer and submit more information on the circumstances surrounding the reassignment of frequencies. The SEC said the new offer period should recommence not later than Oct. 17 this year.
In tracing how a company with control of the much coveted 700 Mhz frequency be valued at such a “low” price when PLDT and Globe paid SMC a total consideration of P69.1 billion primarily for that asset, local stock brokerage Papa Securities earlier complained that all of frequency allocations of Liberty unit Tori Spectrum (formerly Wi-Tribe Telecoms) had been assigned to unlisted affiliate BellTel. As Tori Spectrum had already ceased to be the assignee of these, frequencies, the value of the frequencies was not considered in the valuation when the telecom assets were sold to PLDT and Globe.
The corporate regulators now want Vega Telecom to submit more information on such reassignment of frequencies that had resulted in the “confusion” in the valuation of Liberty shares.
The MRSD had sent a show cause letter dated Sept. 9 to Liberty for failure to timely disclose the reassignment of frequencies. In said letter, the SEC noted that the non-disclosure and omission of such reassignment rendered subsequent disclosure or statement therein “untrue” and “misleading.”
“It can not be denied that the disclosure of the frequency assignment was first made only on July 28, 2016 or approximately 16 months after the occurrence of the reportable material event on the company’s definitive information statement filed on July 28, 2016,” the SEC unit said.
Citing the explanation of San Miguel Corp. which previously controlled Liberty, the MRSD said it was clarified that Tori Spectrum Telecom and its affiliates Bell telecommunications Philippines Inc. and Express telecoms Co. had entered into a unified rollout plan, under which BellTel would shoulder all the capital and operating expenditures for the network and utilize a combined cellular mobile 2G and 4G technology.
SEC said the earliest disclosure was made on Liberty’s definitive information statement for the 2016 annual meetings filed last July 28.
After recently considering additional information received from San Miguel, the SEC now directed Vega to submit more information on the following:
– discussion on the circumstances surrounding the reassignment of frequencies;
– disclosure of the consideration received from the assignment and how it was reflected in Liberty’s financial statement and a discussion of the impact;
– breakdown of purchase price paid by PLDT and Globe to SMC, consisting of payment as actual purchase price, payment for outstanding advances and payment of assumed liabilities; and
– detailed discussion of recent information on the unified rollout by Tori spectrum.
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.