Metrobank unit eyes delisting from bourse

MANILA, Philippines—The Metrobank group plans to bring its investment house, First Metro Investment Corp., back to private hands and is now preparing an offer to buy out the minority shareholders at P89 per share.

In a disclosure to the Philippine Stock Exchange, FMIC said its board had approved the filing of a petition for voluntary delisting with the local bourse and the conduct of the mandatory offer for outstanding shares held by minority shareholders. To allow the investing public to digest this development, trading of FMIC shares will be suspended from 9 a.m. to 10 a.m. on Monday.

Based on the latest PSE data, FMIC has 377 million outstanding shares and a public ownership of 1.94 percent. This suggests that if all minority shareholders accept the tender offer price of P89 per share, FMIC will spend about P651 million to buy back all of their shares.

The tender offer price marks a premium of about 5 percent over FMIC’s closing price of P84.50 per share last Friday. The tender offer period starts on October 22 and ends on November 29 this year, subject to regulatory approvals.

FMIC is set to notify the Bangko Sentral ng Pilipinas and other regulatory authorities of the delisting plans. The PSE has given companies with public float falling below 10 percent until the end of this year to comply or face trading suspension and delisting. By voluntary delisting, FMIC will no longer be under pressure to expand its minimal public float.

FMIC’s delisting plan is still subject to other requirements such as notification to all stockholders, and the filing of a formal petition and proposed tender offer terms and conditions at least 60 days before the delisting date.

Apart from making a tender offer to all stockholders, FMIC must also submit a fairness opinion or valuation report to affirm that the terms and conditions of the tender offer are fair. Also, the listed company applying for delisting must not have any unpaid fees or penalties.

The PSE said it would approve any delisting proposal if this would “not prejudice the interests of the investors.”

Despite a voluntary delisting plan, however, FMIC is still expected to remain a key player in the local capital market. Founded in 1972, FMIC is a leading investment bank in the country with more than 39 years of service in the development of the Philippine capital markets. With assets of P79 billion and a market capitalization of P31.86 billion as of last Friday, it is the largest investment bank in the country today.

FMIC’s equities arm, First Metro Securities Brokerage Corp., recently inked a research partnership deal with DBS Vickers Securities Pte Ltd, a leading securities and derivatives brokerage firm in Singapore, as an initial step towards greater collaboration to facilitate cross-border trading.

“This is in line with First Metro’s thrust towards regionalization. The collaboration opens the door to other exciting projects, including First Metro’s planned investment in regional equities markets.