On Monday, THE LOCAL stock exchange halted the trade of Manila Electric Co. (Meralco) shares, which previously declared the intention of its Meralco PowerGen Corp. (MGen) subsidiary to purchase 100% control of Global Business Power Corp. (GBP) because the distribution utility has yet to apply the specifications for the significant acquisition.
Open-end investment firm First Metro Philippine Stock Exchange Traded Fund, Inc. (FMETF) reported in a regulatory filing that the suspension took place on Monday morning.
The Exchange finds that the following (acquisition of complete control of GBP) activity is protected by the Regulation on Transparency for Major Acquisitions and Reverse Takeovers, as stated by the FMETF, under Article VII of Section 5 of the Unified Listing and Disclosure Laws of the Exchange (‘the Substantial Acquisition Law’).
“In compliance with the Significant Takeover Law, the exchange of the stock of the Company would be halted starting at 9:00 a.m. on Monday, December 28, 2020, awaiting the Company’s comply with the detailed disclosure provision set forth in the said rule,” it continued.
FMETF said that the removal of the suspension would be confirmed at a later date.
“If an issuer or its affiliate has obtained more than 10 percent of the direct interest of an unlisted firm, person or group, or more than the overall book value of the issuer, the trade of the issuer’s shares will be restricted, depending on the PSE disclosure regulations.”
The PSE said the suspension will last until the terms and conditions of the deal are revealed, and the specifics of the business or project purchased are given. Where appropriate, the current audited financial report of the unlisted firm must also be presented to the relevant stock exchange.
The notification laws, however, do not extend in situations where the issuer is combining, consolidating or gaining a stake in its current unit/s.
A few days after MGen’s earlier attempt to completely purchase the Visayas-based GBP by purchasing shares of Beacon PowerGen Holdings, Inc. and JG Summit Holdings, Inc., controlling 56 percent and 30 percent stake, respectively, the trading of Meralco’s shares was deferred by the PSE.
Beacon PowerGen, a wholly owned subsidiary of Metro Pacific Investments Corp. (MPIC), is selling its GBP interest for P22.44 billion. Meanwhile, JG Summit is selling its interest for P12.02 billion.