Petron offers P4.8B for mandatory takeover of Esso Malaysia

MANILA, Philippines - The Malaysian unit of oil giant Petron Corp. will take over the remaining 35 percent in Esso Malaysia Bhd. held by the public for about P4.8 billion.

The move will increase Petron’s presence in Malaysia and Asia in general, the company said in a disclosure to the local bourse yesterday.

“Petron Oil and Gas International Sdn. Bhd. (Petron International), an offshore affiliate of Petron, has served on the board of directors of Esso Malaysia a notice of a mandatory takeover offer to acquire the remaining 94.5 million shares representing approximately 35 percent of total voting shares,” Petron said.

The offer price is 3.59 Malaysian ringgit or P50.52 per share or a total of 339.26 million Malaysian ringgit (around P4.77 billion). The purchases will be completed on March 30.

“The tender offer marks Petron’s entry into the highly-attractive and dynamic Malaysian market and is a strategic opportunity for the company to increase its presence in Asia,” the oil giant said.

The mandatory takeover offer was triggered by Petron International’s acquisition of 175.5 million shares or a 65-percent stake in Esso Malaysia, which is listed on Bursa Malaysia’s main market.

Last August, Petron acquired 65 percent stake in Esso Malaysia from American oil and gas giant ExxonMobil Corp. for $206 million, as well as two unlisted subsidiaries – ExxonMobil Borneo Sdn Bhd and ExxonMobil Malaysia – for $404 million, bringing the total transaction to $610 million.

Part of the deal includes Petron’s acquisition of 35.539 million shares of ExxonMobil Malaysia and 15.45 million shares of ExxonMobil Borneo, giving Philippine conglomerate San Miguel Corp. (SMC) full ownership of the two companies.

SMC already owns 68 percent of Petron Corp., the Philippines’ largest oil refining and marketing company with crude distillation capacity of 180,000 barrels per day and over 1,700 service stations.

Esso Malaysia’s operations in that country include a refinery located in Port Dickson on the west coast with a capacity of 88,000 barrels per day, seven fuel distribution terminals and a network of about 560 retail stations, of which 420 are company-owned.

The Port Dickson refinery currently produces a range of products including gasoline, diesel, liquefied petroleum gas, jet fuel, kerosene and low-sulfur waxy residue. SMC plans to invest up to $1.2 billion to upgrade the refinery.