PSE looks into valuation issues hounding Liberty

The Philippine Stock Exchange is taking a closer look at potential nondisclosure and valuation issues that emerged during Liberty Telecoms Holdings Inc.’s tender offer launched last month, its president Hans Sicat said Tuesday.

The issues were raised by Liberty’s minority stockholders, after they deemed the P2.20 per share tender offer price “too low.”

Brokerage house Papa Securities, in a special report, said the price should be closer to P5 each.

Sicat noted that an investigation was being conducted.

But he also made it clear that while the exchange cared about the rights of minority investors, he said investing came with inherent risks and that speculators should not be rewarded.

“The exchange does not guarantee prices for anyone—minority or major investors,” Sicat said.

The current tender offer for shares held by the minority was launched by Vega Telecom Inc., now controlled by PLDT Inc. and Globe, on Aug. 24. It will end on Sept. 21 this year.

Both telco giants came to control Vega, the owner of Liberty Telecoms, after acquiring the telco holding company of San Miguel Corp. and two related telco assets for P70 billion on May 30.

After the tender offer, Liberty would be delisted from the Philippine Stock Exchange.

Liberty’s minority was contesting how the company was valued, since a fairness opinion and valuation report did not take into account Liberty’s valuable 700 megahertz radio frequency.

They said 80 percent of the total 700Mhz spectrum, potentially worth billions of pesos, was licensed to Liberty.

The valuation report prepared by Punogbayan and Araullo did not consider any frequency assets because these were reassigned from Liberty to another Vega subsidiary, Bell Telecommunications, in March 2015, or while Liberty was still owned by SMC.

Liberty disclosed the reassignment more than a year later, in Aug. 2016, after PLDT and Globe acquired Vega.

Minority shareholders on Aug. 24 sought the help of President Duterte.

They also wrote the Shareholders’ Association of the Philippines, which is now seeking changes to the valuation process for similar tender offer exercises.

Sicat noted that he was “disappointed” at SharePhil’s proposal.

“I think it’s a little bit aggressive for SharePhil to say that because there are complaints by supposed minority shareholders that the processes that have been put forth are unfair,” Sicat said.

“The mere fact that there are complaints doesn’t mean those complaints are valid,” he said.