Liberty owners to get exit option

INDUSTRY giants PLDT Inc. and Globe Telecom said on Tuesday they planned to launch and complete this year a “voluntary” buyout offer to minority shareholders of listed Liberty Telecoms Holdings Inc. in line with the recent acquisition of San Miguel Corp.’s telecommunications unit.

Both companies said they would also purse Liberty’s voluntary delisting, or removal, from the Philippine Stock Exchange, separate filings with the bourse showed.

The announcement on Tuesday caused Liberty shares to jump 10.44 percent to P3.49 each even as PLDT and Globe gave no further details on the price of the transaction, known formally as a tender offer.

The tender offer came up as Liberty was the only publicly-traded firm among those held by Vega Telecom, the holding company that SMC sold to PLDT and Globe last May 30 for P69.1 billion.

Vega, now equally owned by PLDT and Globe, will be the entity used to launch the tender offer.

PLDT said in its stock exchange filing the voluntary tender offer and delisting will start within the third quarter and will be completed before the end of 2016.

“The tender offer price will be subject to and supported by a fairness opinion to be procured by VTI (Vega) and its shareholders,” PLDT said in its filing.

“Accordingly, the tender offer price and the other terms and conditions of the voluntary TO (tender offer) will be announced by VTI and its shareholders after such fairness opinion has been finalised,” it added.

The tender offer is a mechanism designed to protect minority shareholders in an event like a buyout of a company. Specifically, it gives a minority shareholder the option to exit at the same price as the major selling parities.

Both companies insisted that the mandatory tender offer as required by the Securities Regulation Code did not apply in this case, as it was the unlisted shares of Vega, and not Liberty directly, that were bought.

Liberty has a public float of 12.82 percent. Based on Tuesday’s closing price, the tender offer to be launched by Vega would be valued at about P578.8 million.

Vega’s unlisted entities such as Bell Telecommunications, Eastern Telecommunications, Hi-Frequency Telecommunications and Telecommunications Technologies Phils. Inc. were also acquired as part of the deal with PLDT and Globe.

The transaction was aimed at unlocking San Miguel’s radio frequencies, including those in the 700 megahertz band. PLDT and Globe said these were needed to improve internet services, whose quality was said to be lagging behind regional peers.

The deal is now being questioned by the Philippine Competition Commission, which said last week it would launch a comprehensive review before approving the Vega buyout.