FMIC initiates exit strategy from stock exchange

The Metrobank group’s investment banking unit First Metro Investment Corp. has started the process of delisting from the roster of the Philippine Stock Exchange and hopes to complete its exit by Dec. 17.

As part of the requirements for voluntary delisting, FMIC will buy back shares held by minority shareholders at P89 a share from Oct. 22 to Nov. 29, subject to regulatory approvals.

“Going private makes strong business sense because, to begin with, our float is small and insignificant at 1.94 percent,” said FMIC president Roberto Juanchito Dispo, when he was asked  the rationale behind the voluntary delisting. “The company is adequately capitalized and raising the float to (meet) minimum public ownership of 10 percent will just lead to unnecessary excess funding for us. It is also dilutive in earnings and since, in the end, we will be 100-percent owned by Metrobank, investors can focus on the bank’s share since our enterprise value is accretive to the bank.”

Manabat Sanagustin & Co. (KPMG)—the financial advisor of FMIC which conducted the evaluation of the price as well as the terms and conditions of the tender offer—has issued an opinion that the P89 pricing for the tender offer is fair.

If all minority shareholders were to accept the tender offer price of P89 a share, FMIC would have to spend about P651 million to buy back the stock.

Founded in 1972, FMIC is an investment bank with over 39 years of service in the development of the Philippine capital markets.

With assets of P79 billion and a market capitalization of about P33 billion, it is the largest investment bank in the country today.