Stockholders nix tender offer for PAL

Virtually all minority stockholders of PAL Holdings Inc. snubbed tycoon Lucio Tan’s voluntary tender offer that was priced at a steep discount.

Investors holding 3,575 shares, priced at P1.19 apiece amounting to P4,254, participated in the offer that ran from Oct. 22 to Nov. 19, according to PAL Holdings, operator of flag carrier Philippine Airlines.

Putting those numbers in perspective, shares tendered were less than 1 percent of the 2.45 billion shares held by the minority, based on PAL Holding’s 10.22 percent public float. The filing showed that the transactions were done by two foreign banks but the sellers were not named.

As noted, the low tender offer price of P1.19 a share, a 78-percent discount at the time, was the reason for the poor reception.

The results were reported to the Philippine Stock Exchange yesterday.

“Minority shareholders just said ‘no’ and decided not to take it up given the low offer,” said Astro del Castillo, First Grade Finance Inc. managing director.

PAL Holdings closed flat at P3.98 a share on Thursday, giving it a market value of P98.8 billion.

PAL Holdings earlier said the company was priced that way because this was the same valuation used to buy out San Miguel Corp.’s 49-percent stake in the carrier for over $1 billion two months ago.

That transaction was beyond the 35-percent threshold the Securities and Exchange Commission said should trigger a tender offer. But Tan’s Group said the deal should be exempted because there never was any change of control as far as the carrier was concerned.

Tan’s group explained that it retained equity control of the carrier throughout San Miguel’s two-year stint as airline manager and shareholder. Still, the group proceeded with the voluntary offer, which Bautista said had less stringent requirements, to allow shareholders the same chance to exit on the same terms as San Miguel.

Bautista said the voluntary tender was not meant to take PAL Holdings into private hands. An offer was also made for the minority shareholders of Philippine Airlines itself, which is 98.3-percent controlled by PAL Holdings. Those results were not made public since Philippine Airlines is not a listed entity. For Philippine Airlines, Tan offered P0.31 a share.

The offer was conducted through Tan-controlled entities Buona Sorte Holdings Inc. and Horizon Global Investments Ltd., a previous filing showed.