PLC, IHDC eye Asiabest shares at steep discount
PremiumLands Corp. (PLC) and Industrial Holdings and Development Corp. (IHDC) are offering to buy the Asiabest Group International shares held by the public for up to P255.2 million, which is at a big discount and seen to sour investor sentiment.
In a disclosure on Wednesday, PLC and IDHC said they would conduct a tender offer for up to 100 million common shares of Asiabest, representing 33.33 percent of the latter’s outstanding common capital stock, for P2.552 per share.
The tender offer period is set from March 10 to April 7.
READ: Backdoor listing vehicle: Asiabest Group eyes infrastructure play
Ron Acoba, chief investment strategist at Trading Edge Consultancy, said the offer price was a “substantial discount of 87.85 percent from its last close of P21 and a discount of 90.74 percent from recent high of P27.55.”
READ: PSE suspends trading of Asiabest shares
A tender offer is being conducted to allow the buyer to gain control of the company by acquiring a substantial portion of the outstanding stock at a premium to encourage shareholders to sell their shares.
“Obviously, I don’t think anybody who bought recently will tender. It is likely that the stock, following the lifting of its trading suspension, will fall sharply and base at a much lower level,” he added.
The Philippine Stock Exchange indefinitely suspended the trading of Asiabest shares in December last year amid the entry of PLC as a new majority shareholder. PLC, a company led by businessman Francis Lloyd Chua, is part of a consortium that also includes IHDC.
In December, PLC executed a share purchase agreement with Tiger Resort Asia Ltd. to acquire the latter’s stake in Asiabest, making the transaction a backdoor listing.
The transaction involved the purchase of 200 million common shares, which are equivalent to 66.67-percent ownership in Asiabest, for P2.552 each or P510.4 million in total.
Following the tender offer, PLC will pursue at least one follow-on offering within one year from completing the transaction, according to its share purchase agreement.
With PLC’s entry in the listed company, Asiabest is seen to pivot to infrastructure with PLC subsidiary Kabalayan Housing Corp. to develop mass housing projects.
The subsidiaries of IHDC involved in manufacturing, logistics and construction will also be consolidated with Asiabest.
Asiabest, in its comprehensive disclosure, said it would “remain a holding company but will eventually have operating subsidiary companies which will form its end-to-end infrastructure group.”
