Young tycoon Edgar Saavedra has beefed up his stake in construction, engineering and infrastructure group Megawide Construction Corp. to 45.5 percent by buying the second block of shares divested by founding partner Michael Cosiquien for around P6.76 billion.
On Friday, 377.75 million Megawide shares priced at P17.88 apiece changed hands via a special block sale at the Philippine Stock Exchange.
Asked about the transaction, Saavedra said in a phone interview that his personal holding firm Megacore Holdings Inc. had acquired those shares—equivalent to an additional 17-percent stake—from Citicore Holdings Investment Inc. (CHII).
This is in line with Cosiquen’s planned divestment from Megawide to focus on the family-owned cold storage business. However, Saavedra said Cosiquien’s divestment was “not total yet.”
CHII, which is 50-50 percent owned by Saavedra and Cosiquien, being co-founders of Megawide, originally controlled 66.67 percent of Megawide. Earlier this year, CHII sold a 15-percent stake to Saavedra’s Megacore, reducing its stake to 51 percent. Last Friday’s transaction further reduced CHII’s ownership in Megawide to 34 percent.
Meanwhile, Saavedra’s Megacore Holdings separately sold a 3.5-percent stake in Megawide to the state-owned Social Security System (SSS) before acquiring an additional 17-percent interest from CHII on Friday.
As such, Saavedra’s holdings through Megacore now amounted to 28.5 percent as the additional shares bought from CHII more than made up for the dilution from the sale of shares to SSS.
On top of the Megawide shares under his personal holding firm, Saavedra and Cosiquien still each owned 17 percent of the company through CHII.
As such, Saavedra’s total interest in Megawide has gone up to 45.5 percent while Cosiquien’s stake has gone down to 17 percent.
It was earlier reported that Megawide is undergoing a two-year transition phase that will result in the consolidation of shareholder control under Saavedra while Cosiquien is seen focusing on his cold storage business.
The transition is seen to result in an amicable restructuring of Megawide’s shareholder base that will result in Saavedra taking up other shares that Cosiquien will give up. Saavedra had said he would be “happy with 51 percent” ownership of Megawide in the future.
During the construction firm’s organization meeting after the stockholders meeting last September, Cosiquien stepped down as chair but remained as director. Saavedra is now chair concurrent to his post as president and chief executive officer of Megawide.
The two engineers founded Megawide in 1997 after graduating from De La Salle University. Megawide has since grown to be among the country’s leading contractors and infrastructure developers currently valued by the stock market at P38.7 billion.