SMC seeks delay in tender offer for Holcim shares

Conglomerate San Miguel Corp. (SMC) has asked the Securities and Exchange Commission (SEC) to defer the mandatory tender offer for publicly held shares of Holcim Philippines Inc. until after pricing has been finalized and the deal cleared by the Philippine Competition Commission (PCC).

In a disclosure to the Philippine Stock Exchange on Friday, SMC said it had filed an application for exemptive relief with the SEC relating to the conduct of the mandatory tender offer on Holcim Philippines shares by First Stronghold Cement Industries Inc.

First Stronghold is a wholly owned unit of San Miguel Equity Investments Inc., asubsidiary of SMC. This is the entity that signed a deal to buy 85.73 percent of Holcim Philippines, the country’s biggest cement-maker.

The deal valued 100 percent of Holcim Philippines at $2.15 billion, which analysts estimate would translate to a price per share of around P17. However, the agreement signed by SMC and the seller, European cement giant LafargeHolcim, leaves room for upward or downward adjustment in the transaction price.

Apart from the potential variance in pricing postclosing of the deal, the next hurdle for SMC is to have the deal cleared by the PCC, which is mandated to promote and maintain market competition within the Philippines.

Holcim Philippines has manufacturing facilities in La Union, Bulacan, Batangas, Misamis Oriental and Davao and a market share of close to 30 percent.

Typically, the SEC requires the tender offer to be completed first, in case of any intention to take over control of a company, before the consummation of the deal with the controlling shareholder. In this case, however, the exemptive relief seeks to ensure that the pricing is final and regulatory requirements fulfilled before SMC buys out the minority shareholders of Holcim Philippines.

A tender offer gives minority shareholders an option to exit—or pocket gains if a deal is priced at a premium to market—ahead of a change in control of a publicly listed company as the buyer is required to make an offer to buy all other shareholders at the same price agreed with the selling block. —DORIS DUMLAO-ABADILLA