DITO’s (up to) P4.2B follow-on offering approved

The PSE [link] approved the follow--on offering of Dennis Uy’s telecom holding company, DITO CME [DITO 1.94, up 1.6%; 286% avgVol], with an offer period to run from September 26 through October 2, and a tentative listing date of October 10. The pricing date is September 23. Based on the preliminary prospectus, the value of the deal could be between P1.95 billion and P4.20 billion, depending on where the final price falls within the extraordinarily wide range (P1.00 to P2.15/share) provided.

MB bottom-line:  So now it gets interesting. DITO has raised a ton of cash over the past 18 months by selling shares to mysterious buyers through a private placement at the price point of P1.00/share and even went so far as to imply that it may have sold the shares at a lower price if it weren’t prevented by law from selling its shares below their par value. In explaining the lowball P1.00/share price it offered to Summit Telco Corp. for its 1.59 billion shares back in September 2023, DITO said that the price was set at par value because “current book value per share of the Corporation is P -2.21.” Well, the current book value of those same shares is now way worse at P -3.20/share. By DITO’s own logic, anything more than P1.00/share is a rip-off relative to the basis of the deals struck with all those “Unrelated Third Party Subscribers”.   

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