Philweb seeks leeway in tender offer

Businessman Gregorio Ma. Araneta III is seeking exemption from the required holding of a tender offer prior to the consummation of a deal to buy 53.76 percent of gaming technology provider Philweb Corp. from Roberto V. Ongpin.

In a disclosure to the Philippine Stock Exchange, Philweb said the parties were asking the Securities and Exchange Commission (SEC) to exempt the deal from the rule providing that tender offer must be made before the special block sale was approved by the PSE.

“The parties will apply for approval of the block sale from the PSE as soon as the SEC grants the exemption,” the disclosure said.

The deal involves the sale of Ongpin’s 771.65 million shares in Philweb at a price of P2.60 per share or a total of P2 billion.

The exemption sought is just on the timing of the tender offer.  Philweb president Dennis Valdes said Araneta was “happy to do tender offer” on the Philweb shares.

Tender offer is a mechanism which gives minority shareholders the opportunity to exit when there’s a change in a listed company’s shareholder control.  The new investor is required to offer to buy out minority shareholders at the same price that the controlling shareholder group is selling out.

The SEC advised Araneta that it was necessary to comply with the mandatory tender offer.  In a latter dated Oct. 6, the SEC markets and securities regulation department sought confirmation from Araneta of the status of his acquisition of Ongpin’s shares.

The MSRD said Araneta was also required to provide a timeline for the conduct of the tender offer considering that the acquisition would result in his group owning 54.67 percent of Philweb.

Araneta—son-in-law of late strongman Ferdinand Marcos and a board member in the last two years—agreed to buy Ongpin’s stake in Philweb through holding firm Gregorio Araneta Inc.  Ahead of this buyout deal, he had been named as the new chair of Philweb following Ongpin’s resignation.

The intention was to implement the deal in two tranches. The first 653.15 million is to be completed through a special block sale at the PSE. The second tranche consisting of 118.5 million shares—now fully paid but needs to be registered for listing at the PSE—will be completed as soon as shares are registered in the PSE.

With the divestment of Ongpin, PhilWeb intends to reapply for the continuation of its license with the Philippine Amusement & Gaming Corp. to operate a nationwide network of eGames cafes.

Some 6,000 individuals and their families relied on the Pagcor’s 286 e-Games outlets across the country.  The network was operated by Philweb under a service agreement that lapsed on Aug. 10.