Quick Take: On Maharlika and 4 more market updates
Prime Media [PRIM 2.29 14.5%; 1015% avgVol] [link] clarified that its new joint venture with ABS-CBN [ABS 7.09 0.6%; 41% avgVol] will be to produce content for “radio, cable TV, and other platforms”, but will not be for “free TV broadcast”. PRIM said that ABS will not be involved in PRIM’s operations, or in the operations of the Philippine Collective Media Company, a subsidiary of PRIM, that will be used as one of the distribution channels for the content.
MB Quick Take: This might be why the JV announcement coincided with news that ABS”s TeleRadyo will would cease to operate on June 30th of this year. Was TeleRadyo euthanized as part of a non-compete, or did ABS really feel the grass was greener for it through this structure with PRIM? Even with this clarification, we still need many more details to be able to accurately assess how good or bad this JV will be for ABS.
Metro Pacific [MPI 4.45 0.2%; 120% avgVol] [link] clarified the tender offer process by saying that a shareholder’s participation in the tender process is separate from that shareholder’s approval of the delisting. MPI will attempt to gain approval for the delisting on June 6 at the annual stockholders’ meeting, and if obtained, it will push forward with the tender process.
MB Quick Take: Aside from making some of the math on the thresholds needed to delist more clear, this update shows MPI will have a relatively low-risk chance to taste its shareholders’ appetite for delisting through an AGM vote first, without having to conduct a very public and (potentially messy) tender offer. We should know the result this time next week. The only question is when MPI will release the final draft of the fairness opinion.
PSE [PSE 164.00; 128% avgVol] [link] notified that five companies, that were suspended for failure to submit timely quarterly reports, have failed to provide those quarterly reports before the expiration of the extended deadline and will remain suspended. The five companies: DFNN [DFNN suspended], Manila Jockey Club [MJC suspended], MJC Investments [MJIC suspended], Steniel Manufacturing [STN suspended], and TKC Metals [T suspended].
MB Quick Take: DFNN’s excuse is that its business is too cutting-edge for accounting, but I’m not sure that hilarious excuse would apply to the others. These companies have two months to sort it out before the exchange is forced by the rules to initiate delisting procedures. Which could happen in 2038 or so. I’m only joking! Sort of.
Maharlika Investment Fund (MIF) [link] will invest in “blue chip investment opportunities” on the PSE, “from which handsome dividends may be generated”. House Speaker Martin Romualdez said this at the opening of the PSE’s new Events Hall. Mr. Romualdez praised the PSE for “not resting on [its] laurels” and for “still exercising [its] entrepreneurial mindset.”
MB Quick Take: Nothing screams “red flag” like pushing for the urgent creation of a sovereign wealth fund that will invest in… PSE dividend stocks. Am I taking crazy pills? This feels like the state-level version of the CTS Global [CTS 0.82 1.2%; 423% avgVol] IPO, where all that money was urgently raised to ply the foreign markets but was instead pumped into government bonds. “Cool.”
Lopez Holdings [LPZ 3.98 3.9%; 140% avgVol] [link] is rumored to be going through a proxy battle between the Lopez family majority and a group of minority shareholders over a second independent board seat. If the minority succeeds, it will control two-thirds of the independent board and independent board members will be in charge of the corporate governance committee.
MB Quick Take: One thing you’ll notice here as compared to the US or other mature markets is that control is almost always centralized with the family ownership group. Public floats are low, and families try their best to keep them as low as possible. In the US, the top companies, on average, have public floats that are in the 90%+ range. Here, if the minority block succeeds, it will be the first publicly-traded company that is controlled by an independent board (that I know of, unless my research is bad). I guess this battle is why we’ve been receiving those emails of the upcoming LPZ meeting from Investagrams! I thought maybe someone had just confused me for an LPZ bagholder.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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