Aboitiz to make tender offer to WG&A minority shareholders

Aboitiz Equity Ventures Inc. (AEVI) said it will make a tender offer to minority shareholders of William, Gothong & Aboitiz Inc. following its acquisition of a controlling interest in WG&A.

The Aboitiz group has agreed to purchase the combined 61-percent shareholdings of its partners – the Chiongbian and Gothong families – at P3.98 per share or for a total price of P3.65 billion.

Upon completion of the share purchase, the Aboitiz Group will increase its stake in the listed shipping firm to 92 percent from only 31 percent.

The Aboitiz group said the remaining shareholders owning a minority interest in WG&A can sell their shares at the same terms offered to the group of Chiongbian and Gothong.

The offer is being made by the Aboitiz group to comply with the Securities Regulation Code which requires any person or entity intending to acquire at least 15 percent of a listed corporation to make a tender offer to buy the remaining shares held by the firm’s minority shareholders.

The tender offer rules were drawn up by the SEC to provide minority shareholders with an exit mechanism when there is a change in control of a company.

The deal is expected to be closed by end-September or first week of October. ING Barings Bank is the financial advisor for the proposed transaction.

Under the agreement, 50 percent of the purchase amount will be payable in cash on closing date while the balance is payable over a five-year period with interest fixed at 12 percent and a one-year grace on principal.

The Aboitiz group said the transaction is a strategic acquisition as it consolidates its ownership and management position in a company which is the dominant leader in the shipping industry.

WG&A is the country’s largest and most profitable shipping company, operating 23 vessels nationwide. It is the biggest provider of domestic ferry transportation in the Philippines on both the passenger and cargo business.

It was formed via a merger in 1996 of William Lines Inc., Carlos Gothong Lines Inc. and Aboitiz Shipping Corp.

For the six month-period ending June this year, WG&A reported an operating profit of P649 million, an increase of 11 percent from the previous level of P585 million.