National Book Store enters stock exchange through the backdoor

MANILA, Philippines - National Book Store Inc. (NBS), the country’s largest bookstore chain owned by the Ramos family, is entering the local stock exchange through the backdoor.

In a disclosure, Vulcan Industrial & Mining Corp., also controlled by the Ramos family, said its board of directors approved several measures that will allow NBS to join the Philippine Stock Exchange (PSE).

Shares of Vulcan jumped 8.51 percent or 16 centavos yesterday to close at P2.04 following news of the reorganization.

Specifically, the board allowed the transfer of Vulcan’s mining and oil-related assets to another firm.

The listed miner will also change its primary purpose from mining to retail, with its secondary purposes to include wholesaling, publishing, printing, manufacturing, distribution and contracting.

A backdoor listing, which offers a cheaper and faster way to achieve listing status, occurs when a listed firm is acquired by an unlisted firm and the merger will result in a change in business.

In terms of capitalization, NBS said it will convert advances amounting to P363.94 million into shares in the listed firm while infusing P3.03 billion through a share purchase.

The board approved the increase in the authorized capital of Vulcan, whose corporate name will be changed to National Book Store Retail Corp. pending the approval of the Securities and Exchange Commission, to P4 billion from P600 million.

The reorganization is subject to the approval of shareholders during Vulcan’s annual stockholders’ meeting on May 29.

In October, NBS bought P12.86 million worth of shares in Vulcan.

NBS was built by Socorro Cancio-Ramos as a stall in Escolta that sells supplies, novels and textbooks before the Japanese occupation. It now has a branch in Hong Kong, opened in 2007, marking the bookstore chain’s first venture outside the Philippines.

Aside from the flagship chain, NBS, that also sells office and school supplies, the company owns Powerbooks, NBS Express and Bestsellers.

Vulcan, for its part, has been participating in oil exploration projects since 1976 and is part of two consortiums that have petroleum contracts. Its wholly-owned subsidiary Vulcan Materials Corp. is primarily engaged in the quarrying, crushing and marketing of rock aggregates.

The entry of NBS in the PSE comes on the heels of successful backdoor listings of several large companies last year.

For instance, the local unit of Macau casino giant Melco Crown Entertainment Ltd. conducted a backdoor listing through Manchester International Holdings Unlimited Corp., conglomerate LT Group Inc. of magnate Lucio Tan through Tanduay Holdings Inc. and real estate firm Century Properties Group Inc. through East Asia Power Resources Corp.