The Philippine Stock Exchange plans to implement changes on the valuation and issuance of fairness opinions related to tender offers to ensure the investing public is not shortchanged.
PSE president Ramon Monzon said in an interview Thursday said the bourse would submit a proposed rule change in the conduct of fairness that will enable the exchange to hire independent valuation providers.
Monzon said a company conducting a tender offer or requiring fairness opinion would be asked to propose three accredited third party valuation companies.
But instead of the company hiring the third party firm, Monzon said the PSE would choose among the three that will conduct the fairness valuation report.
“We will engage the third party company and we will pay for their services. But we will charge it to the issuer so that there will be no loyalty to issuer,” Monzon said.
The rule change was triggered by the recent tender offer conducted by MCO (Philippines) Investments Ltd., the largest shareholder of gaming firm Melco Resorts and Entertainment (Philippines) Corp.
MCO (Philippines) earlier announced a plan to conduct a tender offer as part of a move to delist from the stock exchange.
MCO Investments hired FTI Consulting Philippines Inc., a PSE-accredited firm, to conduct the valuation and appraisal.
However, several minority investors complained that the tender offer price of P7.25 apiece was too low. MCO Investments, however, proceeded with the tender offer and kept the price P7.25 per share.
Minority shareholders of Melco Resorts also tendered their shares during the offering period, causing the trading of the shares to be suspended as the public ownership dropped to less than 10 percent.
“Everybody was complaining about the valuation of Melco. Everybody saying it is too low. But that is premium to the market already. We were telling the people if the offer price is too low then don’t tender because if will not hit the 10 percent cut off and it not be delisted,” Monzon said.
But since public ownership of Melco Resorts had fallen below the 10-percent requirements, the company would most likely be delisted, he said.
