Aboitiz completes acquisition of WG&A

Aboitiz Equity Ventures Inc. (AEV) has taken over 91 percent of the listed shipping line WG&A after the recent completion of the mandatory tender offer to the minority shareholders worth P1.862 billion.

In a disclosure to the Philippine Stock Exchange, AEV assistant corporate secretary Elsa Divinagracia said the company has concluded the buy-out of WG&A, which it will soon rename to Aboitiz Transport Group Inc., with the additional purchase of some 467.7 million shares at P3.98 each.

"The acquisition of the company is expected to increase its bottomline and increase shareholder value over the long-term," she noted.

Last August, AEV bought out its partners in WG&A for P3.65 billion with the acquisition of 918 million shares, equivalent to approximately 61 percent of the shipping company.

The Cebu-based AEV, one of the country’s largest family-controlled conglomerates, bought the shares owned by the Chiongbian and Gothong groups, two other prominent families in the shipping business. WG&A was formed in 1996 via the merger of the Chiongbiangs’ William Lines, Carlos Gothong Lines Inc. and Aboitiz Shipping Corp., becoming the largest and most profitable shipping company in the Philippines.

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.

Based on the agreement, AEV will pay half of the purchase amount in cash on closing date with the remaining balance payable over five years with interest fixed at 12 percent, and a one-year grace period on principal.

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.

Last week, WG&A said it intends to acquire two more vessels worth a total of $16 million to augment in its present fleet and expand its services for both passenger and cargo handling.

The company’s board had approved the direct purchase of the vessels from Japan’s Meimon Taiyo Ferry Co. Ltd., an affiliate of the global shipping giant Mitsui O.S.K. Lines Ltd.