The comprehensive disclosure required by the PSE’s substantial acquisition rule didn’t really add a lot of flavor to the new stew that we’d already consumed: NOW Corp. [NOW 2.40 susp] bought 1,000,000 shares of its affiliate, NOW Telecom, at a price of P600/share, for a total investment of P600 million, bringing NOW’s stake in NOW Telecom from 19% to 24.23%.
It seems like the only “new” information that we got from this disclosure was the revelation that NOW Telecom will use the proceeds for its “corporate restructuring” (no elaboration?) and the “future prospects of NOW Telecom” (go on...). We also learned that NOW’s justification for this move is that the investment will result in “an increased share” of the growth of NOW Telecom.
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Perhaps that was a polite way of saying, “We just wanted to push some cash to NOW Telecom”. The only hard info that I can see in the disclosure is that NOW will use P135.5 million in existing advances to NOW Telecom towards the payment of the P600 million, with the rest coming in cash.
MB BOTTOM-LINE
Why would that disclosure have taken an entire trading week to produce? It feels like NOW could have released that disclosure the same day as its original disclosure announcing the deal, and put the burden on the PSE to push back and suspend the company. It drives me nuts when companies are cavalier about the tradability of their shares, as one of the fundamental aspects of being a publicly-traded company is the ability of investors to actually trade the shares. It feels both too easy to get suspended by the PSE, and, at the same time, too easy for the company to remain unnecessarily suspended.
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