Holding firm ISM Communications Corp. is making a tender offer to buy the shares held by the investing public at P1.52 apiece, which reflects the market price the day before the offer was announced.
Fresh from the sale of most of its shares in Philippine Bank of Communications to the group of retailer Lucio Co, ISM said it would file an application with the Securities and Exchange Commission to buy up to 1.2 billion of its own shares from anyone who would want to sell at the specified price.
Shares of ISM, which has a public float of 28.24 percent, rose by 2.63 percent to close at P1.56 apiece on Friday when the tender offer was announced.
“With the current trading prices of its stocks at the market, ISM’s board of directors decided to take advantage of the opportunity and reacquire its shares from the open market at the prevailing rate using its excess and unallocated cash,” the holding firm said in its disclosure. “ISM believes that the reacquisition of its shares will [enhance] shareholder value.”
The holding firm, previously led by the group of businessman Roberto V. Ongpin, acquired a controlling stake in PBCOM in 2011. But since then, it has pared down its interest to 1 percent, based on the latest regulatory filing.
Last year, Ongpin sold his stake in ISM to nephew Eric Recto, the new partner of British fund Ashmore.
Recto currently chairs ISM.
Asked whether the tender offer could be a prelude to delisting, Recto said there was no plan to take ISM out of the stock market.
As to why ISM opted for a tender offer instead of a simpler buyback program, Recto said “a buyback is less certain, and drives up the price.”
Based on its closing price on Friday, ISM has a market capitalization of about P2.9 billion.