Aboitiz set to complete buyout of WG&A

The Aboitiz group will be completing its buyout of the listed shipping line WG&A Inc. through a mandatory tender offer it will submit to the Securities and Exchange Commission (SEC), a top official said.

Aboitiz Equity Ventures (AEV) corporate secretary Eugeniano Perez III said the company’s board has approved the tender offer application to the remaining stockholders after it bought out its partners in WG&A for P3.65 billion last August.

The Cebu-based AEV, one of the country’s largest family-controlled conglomerates, has signed an agreement with the major shareholders of WG&A (which stands for William, Gothong & Aboitiz Inc.) for the acquisition by AEV of 18 million shares, equivalent to approximately 61 percent of the shipping company.

Under the SEC’s tender offer rule, the acquisition of at least 35 percent of a listed company should be followed by a tender offer to the minority shareholders at the same acquisition price given to the selling parties.

The acquired shares represent the ownership of the Chiongbian and Gothong groups, two other prominent families in the shipping business. WG&A was formed in 1966 via the merger of the Chiongbians’ William Lines, Carlos Gothong Lines Inc. and Aboitiz Shipping Corp., becoming the largest and most profitable shipping company in the Philippines.

WG&A operates 23 vessels nationwide and is the largest provider of domestic ferry transportation on both the passenger and cargo business. In the first half of this year, its operating profit reached P649 million, up 11 percent from last year’s level. Net income stood at P571 million, on revenues of P6.7 billion.

With the existing 31 percent ownership of AEV in WG&A, the Aboitiz group will control over 92 percent of the company upon the completion of the sale transaction.– Conrado Diaz Jr.