PLDT, Globe to own 95.45 percent of Liberty

Over a third of Liberty Telecoms Holdings Inc.’s minority shareholders decided to keep their shares in the company, rejecting a tender offer launched by the country’s leading telecom firms PLDT Inc. and Globe Telecom amid a looming delisting by Nov. 21 this year.

The final tender offer filed by Vega Telecom, the new controlling stockholder of Liberty, covered 8.27 percent of issued and outstanding common shares of Liberty, which is equivalent to 107 million shares, as of the Oct. 20 deadline.

No go

Vega Telecom, jointly owned by PLDT and Globe, will thus hold 95.45 percent of issued and outstanding shares of Liberty after the tender offer is satisfied.

This suggested that minority shareholders owning 4.55 percent of Liberty, representing about 12.82 percent of the company’s public ownership prior to the tender offer, decided to stick it out with Liberty.

The tendered shares are expected to be crossed on the Philippine Stock Exchange (PSE) not later than Nov. 10.

Vega Telecom made a tender offer to minority shareholders of Liberty at P2.20 per share, a price many of them deemed too low. After lodging a complaint before the Securities and Exchange Commission over the alleged unfair valuation, others eventually decided to sell instead of being stuck as shareholders in a privately held company.

Taxes waiting

Apart from the lack of a price discovery, for shareholders of an unlisted company, the biggest implication is the imposition of higher taxes when shares change hands. The Bureau of Internal Revenue (BIR) imposes capital gains tax and a documentary stamp tax on every sale, barter, exchange or other disposition of shares of unlisted companies.

Specifically, capital gains tax equivalent to 5 percent of the net capital gains amounting to not more than P100,000 will apply while a 10 percent capital gains tax will be imposed on the excess amount. A documentary stamp tax of P0.75 for every P200 of the par value of the stock will also be applied on the sale.

In contrast, trading of shares listed at the PSE are subject only to a stock transaction tax equivalent to 0.50 percent of the transaction value.

Going to court

The minority shareholders who did not tender their shares are apparently still hopeful they will have another recourse to get what they deem as their fair share in the P70-billion telecom asset sale by conglomerate San Miguel Corp.

Many stock brokers advised clients holding Liberty stocks to tender their shares but some investors held their ground.

“I advised all of my clients to tender. The risk-reward ratio for those who will not tender is simply not too favorable,” one stock broker said.

“If you tender your shares, there will be no recourse for you to pursue a court case. The ones who did not tender will most likely go that route,” the broker added.