MANILA, Philippines — Lopez Holdings Inc. would leave the local stock market as part of efforts to "streamline" the Lopez Group's corporate structure by cutting the number of listed holding firms.
Lopez Holdings told the local bourse on Tuesday the company would voluntarily delist once First Philippine Holdings Corp. (FPH), its power unit, completes the purchase of up to 45.59% of the parent's outstanding shares held by minority investors at P3.85 each.
The tender offer price represents a 25% premium over Lopez Holdings' closing share price of P3.08 last Friday. After a 3-day weekend, trading of shares at the company was suspended Tuesday after the announcement.
"It is always a good sign when you see an offer for your shares with a significant premium over the market price. We will be happy for the shareholders who decide to avail of this opportunity to liquidate their investment," said Lopez Holdings President Salvador Tirona, who also serves as chief operating and financial officer.
"If FPH’s tender offer is successful, LPZ will be delisted as part of the Lopez Group’s effort to consolidate the ownership of Lopez Holdings and to streamline the Lopez Group’s corporate structure by reducing the number of Group holding companies currently listed on the PSE from two to just one," Tirona added.
Lopez Inc. — the Lopez Group's ultimate parent entity — will not participate in the tender offer, meaning it won't sell its shares in Lopez Holdings to FPH. The tender offer will start on January 22, 2021 and end on February 19.
Incorporated in 1993, Lopez Holdings serves as the holding firm of FPH and media firm ABS-CBN Corp.
It is still unclear how the company's latest move would affect the operations of its subsidiaries. So far, FPH has grown since it abandoned its coal investments in favor of renewable energy sources 4 years ago. Meanwhile, ABS-CBN has started its shift to digital in a bid to stop a financial hemmorhage since President Rodrigo Duterte's allies in Congress killed the network's bid for a fresh 25-year franchise.
If anything, FPH won't have a hard time buying hefty shares of its parent. "My analyst said Lopez Holdings is cheap in terms of acquisition price, so it should be good for FPH," April Tan, research head of research at COL Financial, said in a text message.