Union Cement completes purchase of Alsons Cement, launches tender offer

Union Cement Corp., in a disclosure to the Philippine Stock Exchange (PSE) and the Securities and Exchange Commission (SEC), stated that it has completed the purchase of an 88-percent stake of the outstanding capital of Alsons Cement Corp. from Cemco Holdings, Inc., the major shareholder of Alsons Cement Corp.

In compliance with the Securities Regulation Code, Union Cement also announced that it will launch a tender offer commencing Oct. 2, 2002 to purchase the remaining 12 percent of Alsons shares held by minority shareholders.

Union Cement announced that, under the terms of its tender offer, minority shareholders of Alsons Cement are to be given the option to tender their shares for cash at the rate of P0.28 for each common share of ACC tendered, or alternately, receive one UCC share for every 3.7 ACC shares tendered, with any remaining fractional shares paid in cash on the basis of a price of P0.28 per share.

"Union Cement’s tender offer provides the minority shareholders of ACC the choice of receiving new UCC shares under the same swap terms as that of Cemco and also gives the option to sell their shares for cash at a significant premium to market prices," commented Roberto Laviña, chief finance officer of Union Cement. "Our preference is to encourage existing Alsons Cement shareholders to become Union Cement shareholders as Union Cement’s board and management are committed to delivering shareholder value over the long-term. However, we realized that there are minority shareholders of Alsons Cement who may prefer cash and we saw to it that we gave them a fair deal as well."

Subject to compliance with the requirements of, and the final approval by the PSE, Union Cement also announced that its board has approved the move to voluntarily delist the shares of Alson Cement from the PSE. "One of our objectives in this transaction is to consolidate the public float and trading activity in Union Cement. We hope that the larger free float and more focused investor interest in our cement operations via Union Cement will give the market sufficient reason to re-rate Union Cement in line with its strengthened fundamentals," said Dr. M.B. Albarracin, Jr., president of Union Cement.

Union Cement’s tender offer period will run from Oct. 2, 2002 up to Nov. 12, 2002. In the Sept. 19, 2002 meeting of Alsons Cement’s directors, the board of directors had unanimously agreed to endorse Union Cement’s tender offer to Alsons Cement’s minority shareholders. "Based on the review of the Union Cement offer, the ACC board agreed that the offer is fair and that the transaction will indeed benefit both Alsons Cement and Union Cement shareholders," said Paul O’Callaghan, chief operating officer of Alsons Cement.

ING Bank N.V. acted as financial adviser for the transaction.