Any acquisition involving 35 percent or more of a listed company would trigger a mandatory tender offer. This means that the purchasor shall offer to buy the remaining shares held by minority shareholders at the same terms given to the majority owners.
Under the deal, Saturn will subscribe to P1.23-billion worth of Balabac shares, which shall come from the listed firm’s increase in capital stock from P73.8 million to P5 billion.
Citing Section 19. 3 (a) of the Securities Regulation Code, Balabac said the SEC may exempt from the requirement to make a tender offer the issuance of its newly unissued shares to Saturn Holdings Inc.
The Corporation Finance Department has recommended the approval of Balabac’s request. The matter will be taken up during the SEC’s commission meeting today.
Incorporated in 1997, Saturn replaced Round Peak Realty & Development Corp., which was earlier identified by Balabac as the buyer for the new shares. It has a 2.13-percent stake in Tanduay Holdings Inc. Round Peak is a real estate development firm based in Cavite.
Round Peak had committed to pay approximately P300 million or 25 percent of the subscription in cash.
The Balabac board of directors earlier approved a proposal where all stockholders would be given the right to subscribe at par (P1) to shares of the corporation, after the increase in authorized capital stock to P5 billion. Stockholders would be allowed to subscribe to two shares for every one share held.
Balabac was incorporated in April 1971 to engage in oil exploration and mineral development projects. However, it is no longer engaged in its primary business after it transferred all its assets and service contract to 40 percent-owned Phoenix Energy Corp.