Sy Jr firm mulls capital hike to fund planned investments

MANILA, Philippines - Listed investment holding firm UEM Development Corp., now 47 percent owned by the eldest son of retail mogul Henry Sy, may raise its authorized capital and undertake a follow-on offering to fund planned investments.

In an amended tender offer report, Henry Sy Jr. said he may propose that the company make equity investments which shall entail an increase in the capital stock of the listed firm and incurrence of additional indebtedness.

“A portion of the increase in authorized capitalization may eventually be offered to the public,” he said.

Sy Jr., president and chief executive of National Grid Corp. of the Philippines (NGCP) and vice-chairman and CEO of SM Development Corp., now holds 23.285 million common shares of UEM, representing 47.07 percent of the total issued and outstanding common shares, following the completion of the tender offer.

The tender offer was made after Sy Jr. obtained a binding commitment for the acquisition of 22.5 million UEM shares, equivalent to 45.59 percent of the company, from selling shareholders East Fleming Holdings Corp., Great Epoch Group Holdings, Treshold Corp., Potcast Holdings, Bernie Buenaseda and Rolando Sulit. The shares were acquired for P2.89 per share for a total of P65 million.

Under the securities law, “any person or group of persons acting in concert who intends to acquire 35 percent or more of equity shares in a public company shall disclose such intention and contemporaneously make a tender offer for the percent sought to all holders of such class.”

To comply with the mandatory tender offer rule, Sy Jr. has offered to purchase the remaining approximately 54.51 percent of UEM from other shareholders at P3 apiece, which is more than the price paid for the shares held by the selling shareholders. 

According to Lucky Securities, the broker appointed to implement the tender offer, only one stockholder – Starfield Holdings Inc. owning 785,740 shares accepted Sy Jr.’s offer, falling short of the Sy heir’s plan to obtain 100 percent ownership of UEM.