Solar Philippines [SPNEC 1.69 0.59%] [link] SRO offer period ends today. The SRO price is P1.50/share, and the entitlement ratio is one SRO share for every 1.28 SPNEC shares owned. The SRO price represents an 11% discount from Friday’s closing price of P1.69/share.
MB Quick Take: The size of the SRO is actually quite small (only an 18% increase in outstanding shares), and the difference in price between the SRO and market is also quite small (only 11%), so the impact of this SRO’s listing on the stock price is going to be also quite small. The biggest thing to watch is whether current holders are exercising their SRO rights with the long-term in mind (capturing the potential value of SPNEC’s massive development plan), or with the short-term approach of flipping the slightly discounted shares for a small profit.
Converge [CNVRG 17.88 2.05%] [link] confirmed that it has made no decision on whether to sell a stake in its infrastructure assets, but noted that it was aware of the “significant value of its infrastructure assets”, and that it would update the exchange with material updates as they arose. Bloomberg reported that CNVRG was exploring a transaction to sell an interest in its network infrastructure to raise capital, similar to what Globe [GLO 2194.00 2.52%] and PLDT [TEL 1669.00 1.15%] executed. Bloomberg referenced an unnamed source claiming that a potential transaction could be worth around $1 billion.
MB Quick Take: There is a vibrant market for these kinds of assets right now. If I were a CNVRG shareholder, I’d think that my executive team was being negligent if they weren’t at least exploring the feasibility of that kind of transaction. Companies explore deals like this all the time. It’s just that we don’t normally hear anything about it unless (1) the company kind of wants us to know about it, or (2) things have progressed to such a point that outside actors are involved (lawyers, accountants, consultants) and details of the potential deal start to leak. The “people familiar with the matter” line makes me think it's the latter, but if it was a trial balloon meant to test market sentiment, at least the stock’s 2% rise will give the company positive feedback on the news.
Keppel Philippines Holdings [KPH 9.18] [link] took a closer look at its books and realized that its outstanding shares were actually under-reported on the PSE website by nearly 50%, and that the outstanding shares of its KPHB tranche was actually over-reported on the website by 58%.
MB Quick Take: Not sure what to make of this, but the fact that it could happen makes me think that there’s a disconnect somewhere in the system that desperately needs to be closed to prevent another Abra Mining [AR suspended] disaster for PSE investors. What lack of internal controls allowed KPH to get to a place where a reconciliation produced such a drastic change in its outstanding shares? The integrity of this kind of stock data is critically important to investors, and I’m disappointed that all we get is this “FYI” kind of notice that says the data will be corrected as of September 6. What caused this? Has KPH made any changes? Has the PSE? Is there something that I'm missing here?
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