Corporate News

By Keith Richard D. MarianoReporter

Liberty Telecoms formally seeks PSE delisting

Posted on August 26, 2016

LIBERTY TELECOMS Holdings, Inc. (LTHI) has moved to formalize its bid to exit the stock market.

A CELL SITE tower. Liberty Telecoms Holdings, Inc. yesterday said the share price it set for the tender offer did not take into account the coveted 700-megahertz spectrum.
The company submitted on Wednesday a petition for the voluntary delisting of its common shares from the Philippine Stock Exchange (PSE) setting the delisting date on Oct. 31. The decision comes after the company was taken over by industry giants PLDT, Inc. and Globe Telecom, Inc.

In a letter to the bourse, Liberty Telecoms Co-President and Co-Chairman Ray C. Espinosa confirmed the voluntary delisting was unanimously approved by the company’s board of directors elected during an annual stockholders meeting on Aug. 18.

“On the basis of the foregoing, we hereby request for the approval of this petition for voluntary delisting, with Oct. 31, as the target date of the delisting of the LTHI shares from the exchange,” Mr. Espinosa said.

Mr. Espinosa further asked the PSE to confirm that a five-year relisting prohibition does not apply to Liberty Telecoms to the effect that the company will be allowed to again its shares any time in the future.

In addition, Liberty Telecoms sought the bourse’s confirmation that its current directors and executive officers will not be disqualified to hold such positions in other companies applying for initial listing.

The petition came amid the ongoing voluntary tender offer launched by controlling shareholder Vega Telecom, Inc. for the remaining 165,883,221 common shares or 12.82% it does not own in Liberty Telecoms.

Vega Telecom is buying out other shareholders in the listed telecommunications holding firm for P2.20 per share or more than P364.9 million in total. Minority investors have until noon of Sept. 21 to accept the offer.

The offer followed the acquisition of the idle telecommunications assets of San Miguel Corp., including most of the 700-megahertz frequency, by the incumbent industry players in a $1.5-billion transaction announced on May 30.

The offer price, Vega Telecom said, was above and a premium on the prospective fair value of Liberty shares ranging from P0.08 to P0.33 apiece based on the valuation report and fairness opinion of an independent auditor.

In a special report “Screwing Liberty” issued on Wednesday, however, Papa Securities Corp. deemed the price low for a company controlling the coveted 700-megahertz spectrum.

“At the end of the day, San Miguel received the full value of the spectrum, PLDT and Globe have the spectrum (subject to PCC approval), and the minority shareholders will receive much less than they deserve,” the report written by analyst Lemuel Uy read.

The report of Papa Securities noted the frequency had apparently been transferred to sister company BellTel since March last year and that Liberty Telecoms has not received a single centavo in return.

“For more than a year, the company kept its investors in the dark as to what it owned, or did not; a clear case of misrepresentation,” the report noted. “Just imagine the shock of LIB (Liberty Telecoms) investors when the realization hits them that each share of the company they own is now worth less than a stick of gum.”

In response, Liberty Telecoms said the tender offer price was based on an independent fairness opinion that did not take into consideration the value of the frequencies because it no longer owned them when Globe and PLDT acquired Vega Telecom.

“We would like to further clarify that the consideration of P70 billion [for the transaction among Globe, PLDT and SMC] does not pertain to Liberty Telecoms alone, but covers the combined equity value of P52.8 billion of Vega Telecom, Bow Arken and Brightshare; and, assumed liabilities of P17.2 billion of Vega Telecom, Bow Arken and Brightshare,” it told the PSE on Thursday.

Shares in Liberty Telecoms closed two centavos higher or 0.93% to P2.17 apiece on Thursday.