Tuesday, June 25, 2024

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Possible rewording: Consideration being given to compensation for investors of companies being removed from the stock market.


The PSE is contemplating changing market regulations to mandate that corporations, who have failed to meet the minimum public float requirement, compensate shareholders who have already offered their shares before a tender offer deadline.

At a forum in Taguig City last week, PSE President Ramon S. Monzon informed reporters that a proposed amendment has been approved by the board for public feedback. The amendment states that if a company fails to meet the public float requirement before the tender offer deadline, they will be obligated to file and pay for it.

According to Mr. Monzon, if the company has already reached the required level and wants to prolong it, they are allowed to do so. However, they must prioritize paying those who have already offered their shares.

Mr. Monzon stated that the suggested revision was suggested following the removal of conglomerate Metro Pacific Investments Corp. (MPIC).

“According to Mr. Monzon, our guideline is to reach a threshold of 95%. For instance, MPIC exceeded this requirement during its initial tender offer by obtaining 96.87% of total shares and further extended the offer to acquire an additional 0.3%.”

“He stated that the payments for the 18.7% [of total shares] were delayed. The company should prioritize paying those who have already submitted their commitments.”

“Each instance of revising our regulations requires a submission for public feedback, followed by submission to the Securities and Exchange Commission (SEC). Once we receive public comments, we review them before submitting our final rule to the SEC,” he explained.   

MPIC has decided to prolong the time frame for its tender offer for shares until September 19, instead of the previously announced September 7. This extension aims to provide minority investors with additional time to make their decision.

The company stated that the bidders have chosen to prolong the tender offer period in order to give the remaining shareholders of MPIC, who were unable to meet the deadline of Sept. 7, 2023, additional time to fully understand the latest updates on MPIC’s delisting and decide whether to take part in the tender offer.

Last week, the PSE gave its approval for MPIC to delist after the conglomerate successfully completed a P28.4-billion tender offer to buy out the remaining shares held by minority investors. Due to its public float falling below the minimum requirement for listed companies, the company’s shares were suspended.

In August, the main shareholders of MPIC decided to willingly remove the company from the stock market.

MPIC is a significant Philippine division of First Pacific, a Hong Kong company. The other divisions include Philex Mining Corp. and PLDT Inc.

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