Ferronoux Holdings [FERRO suspended] [link] provided the required “comprehensive corporate disclosure” on its acquisition by Themis Group (THEMIS) and the backdoor listing that will result from the property-for-share swap transaction that the parties will use to complete the deal. Instead of cash, THEMIS will “pay” for its 918 million primary FERRO shares using three parcels of land (94,114 sqm) owned by a company called Eagle 1 Landholdings (EAGLE). The land is in Tambo, Parañaque, adjacent to the Okada Manila complex which is on land that is also owned by EAGLE. According to FERRO, the company will conduct a follow-on offering within one year of this transaction.
MB BOTTOM-LINE: It’s going to be interesting to see how the market price of FERRO’s shares (P5.35/share back when it was suspended on December 18) will react to the per-share transaction price implied by this deal (P4.70/share). The deal price is about 12% lower than market, which sounds like a lot, but is not actually that big of a problem for a stock that suspiciously shot up 172% in just three weeks of trading. Flipping from FERRO’s price action to its business plan, I think this disclosure paints a picture that makes a little more sense than the Megaworld “lite” mixed-use development talk that FERRO gave us a few weeks ago. The image I’m getting is that an Okada-adjacent group is backdooring FERRO to do Okada-adjacent things, which is great for THEMIS and EAGLE, but it’s more difficult to predict how things will go for FERRO shareholders in situations like this where it’s not clear whether ownership’s incentives are closely aligned with those of the minority shareholders.
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