THE Philippine Stock Exchange, Inc. (PSE) is studying the possibility of independent valuation providers rendering opinions on tender offers, after investors raised concerns over the tender offer by Melco Resorts and Entertainment (Philippines) Corp. (MRP)’s largest shareholder.
“We’ll come out with the formal comment process for that once we get the finer details,” PSE Chief Operating Officer Roel A. Refran said in a briefing at the PSE office in Bonifacio Global City on Friday.
Mr. Refran said the exchange has initiated the comment process after receiving letters from retail investors and brokers in the past four weeks in relation to MRP’s tender offer.
MRP’s largest shareholder, MCO (Philippines) Investments Ltd, previously announced a plan to conduct a tender offer as part of a move to delist from the stock exchange.
Some trading participants interviewed by BusinessWorld however said that the tender offer price of P7.25 per share was unfair, as it was well below MRP’s follow-on offering in 2013 priced at P14, guaranteeing a loss for those who took up the shares.
Shareholders also said should they fail to tender their shares, they will become illiquid once MRP delists.
MCO Investments later withdrew its delisting plan, but noted that it will still conduct the tender offer to increase its stake in MRP. It also maintained the tender offer price of P7.25.
MCO Investments engaged FTI Consulting Philippines, Inc., a PSE-accredited firm, for the valuation and appraisal.
Mr. Refran said the PSE may change the rules on accredited valuation providers, as per PSE Memorandum No. 2011-0104, or the Guidelines for Fairness Opinion and Valuation Reports, after the formal comment process.
“Right now, these are in the PSE rules on accredited valuation providers. That’s what we’ll be changing,” he said.
In 2016, the Shareholders Association of the Philippines also asked the PSE to revisit valuation rules for voluntary tender offers “to minimize doubt of the investing public on the fairness of tender offer prices.” — Arra B. Francia

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