Biz Buzz: High Fidelity

It was one of the biggest private placement deals in recent memory, but businessman Andrew Tan’s P7.87-billion sale of part of his direct stake in flagship firm Alliance Global Group Inc. last week was relatively a hush-hush affair in terms of the identity of the buyer.

People privy to the deal would only say it was one of the world’s biggest investment funds that sought and got a stake in AGI and its apparent prestige was enough to convince Tan despite his initial unwillingness to sell (of course, coupled with what we could only imagine was an irresistible pitch by UBS Philippines managing director Lauro Baja III).

In any case, the buyer of most of the 2.7-percent AGI block has now been unmasked, thanks to our sources. The investor is none other than Boston, Massachusetts-based Fidelity Investments, a global financial services firm, which oversees about $1.7 trillion in assets. No wonder it was a deal Tan couldn’t resist.

After all, the presence of prominent funds like Fidelity act as a stamp of approval for these companies, giving them added credibility overseas especially when it comes to fundraising.

Our sources said Fidelity was actually seeking a much larger stake in AGI, which owns homegrown brands like Megaworld Corp. and Emperador brandy, but this was all Tan was willing to give up at the moment.

Just the way Filipino performers and laborers are praised worldwide for their skills and passion, it is about time as well that our corporations receive the recognition they deserve globally. Miguel R. Camus

In limbo

The PLAN of Century Properties Group Inc. to list additional shares on the Philippine Stock Exchange (PSE) hit a snag recently, throwing a spanner in the works for the real estate developer’s capital market plans.

And the snag is no laughing matter, apparently. To be more precise, the snag is worth about P4 billion, according to our sources.

Biz Buzz learned that the Bureau of Internal Revenue (BIR) recently revoked a permit it granted to Century Properties allowing the firm to execute a share swap required by the local bourse.

The scheme calls for the Antonio family that controls the firm to infuse P4 billion  into the listed firm in exchange for shares that would form part of the company’s outstanding stock. Since such a swap is, in accounting parlance, a “taxable event,” permission had to be sought from the BIR to defer the tax liabilities from such a swap.

Biz Buzz learned that the BIR had initially given the green light, but when the document reached the desk of the country’s chief taxperson, some questions were raised. Given the amount of taxes that the government stands to lose on the scheme, the permit was revoked.

As a consequence, the PSE board could not give its approval to the share swap. So what happens now? No one knows yet, apparently.

In this transaction, CPI subscribed to 4 billion common shares of CPGI at a price of P1 per share, for an aggregate price of P4 billion.

In essence, the share swap involved the exchange of shares between CPI and CPGI. After the transaction, the listed company CPGI became the holding company.

Century Properties believes that swapped shares should be tax exempt as, as such, applied for a BIR certification in November 2011. After more than two and a half years, BIR ruled in favor of granting the tax exemption in last month. But last July 4 the BIR said it would conduct a review of the share swap and recalled its previous ruling.

The company said it has not received a formal written letter from the PSE that it is withholding Century Properties’ listing application. — Daxim L. Lucas

Prorated birthday blast

Within the group of companies run by businessman Manuel Pangilinan, his birthday celebrations are big, much-awaited affairs.

And so it was last Monday, with 68th natal day greetings for the PLDT chair pouring in from just about everyone in his organization, from rank-and-file employees to ranking officials running the various Metro Pacific units.

Some of the most interesting birthday greetings, however, came over social media, specifically the microblogging site Twitter— specifically the members of the NBA All-Stars who are set to visit the country for tune up games with the Gilas basketball team.

The first came from Toronto Raptors shooting guard Terence Ross, who tweeted: “MVP I think what you do in honor of your birthday for the Filipinos is amazing. Giving back is why we do what we do. See you soon!”

Another Raptors shooting guard DeMar DeRozan, who also tweeted his admiration, saying: “I love Filipino basketball fans but I hear you are the biggest one of all, MVP. Looking forward to seeing you! HBD!”

Finally, there was one tweet from Indiana Pacers shooting guard Paul George that got everyone in the basketball community excited: “We are going to give the Gilas National Team a real workout in honor of your birthday next week! Watch out!”

Finally, Pangilinan’s birthday bash would be incomplete without the de rigeur newspaper birthday supplements that his staff put out every year. And the distribution was prorated, mind you.

A six-page supplement was published on the the country’s top news daily, Philippine Daily Inquirer (in which Pangilinan holds a minority stake); four pages in the Manila Bulletin, and one page in the Business Mirror. But the bulk of the pages for the birthday supplements went to the newspaper which the tycoon now controls: They put out seven pages in BusinessWorld, and—hang on to your seats—10 whole pages worth of happy birthdays in the Philippine Star. Whoa. Daxim L. Lucas

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