The board of Energy Development Corp. approved the company’s plan to voluntarily delist its common shares from the Philippine Stock Exchange as public ownership is expected to fall below five percent after its scheduled tender offer.
The voluntary delisting, which will provide greater corporate flexibility, follows regulations covering the conduct of a tender offer to all common shares held by the public at a price of P7.25 apiece.
“The intention to eventually delist EDC was shared with the market last year and the tender offer that our board has approved today presents a meaningful opportunity for our minority shareholders to realize their investment prior to the delisting of the company, at a significant premium to the current share price,” EDC president and chief operating officer Richard Tantoco said.
Philippines Renewable Energy Holdings Corp. in September last year completed a voluntary tender offer to acquire 8.9 billion common shares of EDC.
The geothermal company said PREHC and parent First Gen Corp. at that time communicated to the market their intentions to eventually delist EDC “to pursue a corporate strategy that would require greater flexibility over factors like its dividend policy and leverage, and to support long-term growth.”
PREHC is a consortium of investors comprising of funds managed by Macquarie Infrastructure and Real Assets and Arran Investment Pte. Ltd., an affiliate of GIC Pte. Ltd., which own and operate a combined installed capacity of over 18 GW globally.
EDC’s tender offer price of P7.25 per share represents a 46-percent premium over the closing share price of P4.95 on August 7 and a 4-percent premium over the three-month volume weighted average price of P5.18.
KPMG, the independent financial adviser issued an opinion based on an independent valuation that the tender offer price is fair and reasonable from a financial point of view.
EDC said that subject to the filing of the tender offer report with the Securities and Exchange Commission, the tender offer period could start from September 25, 2018 to October 22, 2018.