PSE tosses to SEC tender offer issue on Petron shares

The Philippine Stock Exchange (PSE) has tossed to the Securities and Exchange Commission (SEC) the issue on the applicability of the mandatory tender offer rules in connection with the option agreement between San Miguel Corp. and SEA Refinery Holdings B.V. on the acquisition of shares of oil giant Petron Corp.

In a letter to the SEC, the PSE’s Issuer Regulation Division headed by Ray Joseph Rafols pointed out that the legislative intent of Sec. 19 of the Securities Regulation Code is to regulate activities relating to acquisition of control of listed company and for the purpose of protecting the minority shareholders of a listed corporation. 

Rafols noted that the same rule States: “Whatever may be the method by which control of a public company is obtained, either through direct purchase of its stocks or through an idirect means, mandatory tender offer applies,”

He said the SEC may nullify any purchase of shares of a public company at threshold amounts without the required tender offer. This, he said, is without prejudice to the imposition of other sanctions under the Code.

Under the option agreement , San Miguel has the exclusive right to acquire up to 100 percent of SEA Refinery Holdings B.V.’s interest in SEA Refinery Corp. which owns 50.1 percent of Petron. The option may be exercised by San Miguel within a period of two years from Dec. 24, 2008.

An SEC official earlier argued San Miguel is not yet required to make a tender offer at this time considering that the threshold level that will trigger a tender offer has not yet been reached or crossed.

Under the tender offer rule, any investor who buys at least 35 percent of a company must offer the same terms to other shareholders of the target firm.

“Under the SRC, a person is deemed to own a security if he has an option to purchase it and has exercised such option,” said SEC commissioner Juanita Cueto.