THE board of directors of listed construction firm Megawide Construction Corp. approved the move to fully acquire PH1 World Developers, Inc. for P5.2 billion.
“The purchase price was arrived at after a careful deliberation by the company and valuation study of PH1 in accordance with the 2022 International Valuation Standards,” Megawide said in a disclosure to the Philippine Stock Exchange on Wednesday.
Under the transaction, Megawide will be acquiring 100% of the outstanding capital stock of PH1 or 579.46 million common shares.
PH1 is a subsidiary of Citicore Holdings Investments, Inc., which also holds a 35% interest in Megawide as stated in the listed company’s 2022 annual report.
Megawide said that based on the fairness opinion report issued by FTI Consulting Philippines, Inc., the purchase price is fair from a financial point of view.
In its findings, FTI Consulting’s estimated value for PH1’s shares as of the valuation date is from P3.82 billion to P6.17 billion.
“PH1 was valued by analyzing its project entities separately, taking into account PH1’s non-operating assets and liabilities, net debt, and corporate overhead to arrive at its equity value,” the transaction consultant said.
“We applied different valuation approaches and methodologies in valuing the project entities as deemed appropriate and applicable to the projects’ circumstances,” it added.
However, the acquisition is still subject to the approval of the stockholders at the company’s annual stockholders’ meeting on July 12.
On Wednesday, shares in Megawide closed unchanged at P3.29 apiece. — Justine Irish D. Tabile