Merkado Barkada
January 14, 2025 | 8:10am
Speaking on behalf of PremiumLands Corp. (PLC), Asiabest Group [ABG suspended] confirmed a report that PLC will conduct a mandatory tender offer for ABG shares [link]. In the report, PLC representatives are quoted talking about a tender offer in “January or February”. While the terms of the tender offer (including price) are not yet known, the representative did mention that PLC’s acquisition price of P2.55/share would be a floor price, saying “We just can’t go below P2.55.”
MB bottom-line: If this were me acquiring ABG before I injected a buttload of assets into it as a vehicle for my ambitious crony growth, I’d want to scoop up as much of ABG’s outstanding shares as I could, as cheaply as possible, and as quickly as possible. The challenge is that ABG has a public float of 33.32% (~99,960,000 shares), and this isn’t a delisting so existing shareholders won’t be incentivized by the darkness of the non-public abyss to sell their shares during the tender offer. PLC’s owner, Francis Lloyd Chua, is also going to have to contend with the “problem” that the P2.55/share acquisition price is not at all representative of ABG’s trading history. It reached that level ever so briefly back in April 2023, but otherwise, has traded well above that by every metric that might be used to determine the tender offer’s price. The average selling price through all of Q4 was approximately P19.00/share across 15.8 million traded shares. That’s a good chunk of the public float that has just recently been purchased for a massive premium to Mr. Chua’s acquisition price. That said, I don’t pretend to know what Mr. Chua wants, or what all those legitimate pre-acquisition buyers want.
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