Lotte consolidating stake in Pepsi PH, delisting seen possible

Korean conglomerate Lotte is making an offer to buy out other shareholders of Philippine beverage-maker Pepsi Cola Products Philippines Inc. (PCPPI), a transaction that could lead to its involuntary delisting from the local stock exchange.

In a public notice, PCPPI said Lotte Chilsung Beverage Co. Ltd. would offer to buy about 2.134 billion common shares equivalent to 57.78 percent of outstanding stock of PCPPI at P1.95 per share. This will amount to an equity deal of as much as P4.16 billion.

The offer marks a premium of about 39 percent from the P1.40 per share closing price of PCPPI on Tuesday, December 10. On Wednesday, PCPPI went on a one-day voluntary trading suspension at the Philippine Stock Exchange.

The tender offer started on Dec. 12 and will run until January 15, 2020.

As Lotte already owns 38.88 percent of PCPPI, the potential purchase of other shares will allow the group to consolidate its ownership to 96.66 percent. However, the public float could fall below the 10 percent minimum required by the PSE to remain listed on its bourse.

PCPPI stated in the tender offer report that it had “no plans” to delist from the PSE at present but acknowledged that it could be subject to involuntary delisting if it could not comply with the minimum public ownership of 10 percent.