MANILA, Philippines - The Philippine Stock Exchange (PSE) suspended trading in shares of LMG Chemicals Corp. for a period of 10 days beginning yesterday upon the request of the listed firm’s majority shareholders pending completion of talks with a prospective buyer.
In a letter to the PSE, Chemical Industries of the Philippines (CIP), which owns 73 percent of LMG’s outstanding capital, sought the suspension of trading in its shares as well as LMG’s shares to avoid undue speculation and allow negotiations to go on smoothly.
“We are currently in negotiations with a buyer for the privately-held shares in LMG. Hence, to prevent our talks with our potential buyer from being jeopardized, and in order to protect the public from unauthorized sale of LMG shares and to avoid further undue speculation, we request to suspend the trading...,” CIP president Ana Maria G. Ordoveza said.
Prior to the suspension, LMG and CIP were last traded at P6.05 and P137, respectively, apiece yesterday, higher than their closing price of P6 and P92.25 Friday.
LMG’s share price has significantly increased since the start of the year. From only P1.21 on Jan. 2, the stock has reached multiple highs, hitting a record P8.40 each on talks of a looming change in ownership.
As early as 2010, LMG was offered to certain groups interested in taking over a listed shell company to serve as their backdoor ticket but nothing materialized.
LMG has a public float of only 0.2 percent, thus falling below the required minimum public ownership of at least 10 percent. The company told the stock exchange in December that it was taking steps to comply with the requirement.
As of Feb. 6, LMG had a market capitalization of P1.16 billion.
Incorporated on April 20, 1970, LMG is primarily engaged in the manufacture and distribution of sulfuric acid and detergent sulfur. Sulfuric acid is used in car batteries, fertilizers, detergents, water treatment and wastewater treatment.
In 2007, LMG underwent a major corporate restructuring after transferring its assets and liabilities to its two wholly-owned subsidiaries, Chemphil Manufacturing Corp. and LMG Land Development Corp. It transferred its acid plant and tank farm properties to consolidate the acid plant and tank farm operations into individual holding companies for better management and monitoring.