Dennison Holdings Corp. of Davao City-based businessman Dennis Uy is acquiring a 45.13-percent stake in ISM Communications Corp., a listed company led by businessman Eric Recto, for P1.28 billion.
ISM Communications said in a disclosure to the stock exchange its executive committee approved on Wednesday the subscription by Dennison Holdings to all of the company’s 883,730 million unissued common shares at a price of P1.45 apiece.
The subscription price represents a 47.8-percent discount to the stock’s closing price of P2.78 per share Wednesday.
ISM Communications said 25 percent of the P1.28 billion purchase cost would be paid upon subscription, while the 75-percent balance would be settled before end-2018.
“The shares subscribed by Dennison is equivalent to 45.13 percent of the resulting outstanding capital stock of the company,” ISM Communications said.
The deal is exempted from the mandatory tender rule of the Securities Regulation Code.
Rule 19.3 of the Securities Regulation Code exempts any purchase of securities from the unissued capital stock from the mandatory tender offering requirement. “Provided, the acquisition will not result to a fifty percent or more ownership of securities by the purchaser or such percentage that is sufficient to gain control of the board,” the rule stated.
ISM Communications disclosed in June that Uy planned to participate in the company’s P2.5-billion private placement.
Under the plan, the company will issue 841.945 million treasury shares and the remaining 883.730 million unissued shares of the authorized capital stock via a private placement at a minimum issue price of P1.45 apiece.
ISM Communications said it intended to use the proceeds of the issuance to fund the investment opportunities currently being pursued by the management.
Uy also owns several listed companies including Chelsea Logistics Holdings Inc., Phoenix Petroleum Philippines Inc., 2Go Group Inc. and Philippine H2O Ventures Corp.
ISM was originally incorporated under the name Itogon-Suyoc Mines Inc. to engage in the mining business.
The stockholders of ISM approved in 2002 a restructuring plan for the company, which involved the change in corporate name to its present name and the change in primary purpose to engage in the business of telecommunications, multimedia and information technology.
The Securities and Exchange Commission approved the amendment of the articles of incorporation of ISM on Nov. 11, 2016, to reflect its primary purpose as a holding company.
ISM owns 32 percent of Acentic GmbH (Acentic), a German provider of internet connectivity and inter-room entertainment solutions for the hospitality industry. The company also owns a 37.1-percent stake in Philippine Bank of Communications.