The Philippine Stock Exchange issued the draft amendments to its voluntary delisting rules that will require a company to obtain the approval of all independent directors and 75 percent of a company’s shareholders.
The PSE said the draft amendments to the voluntary delisting rules, which are at par with rules of ether exchanges, would ensure the participation of the minority shareholder in the process.
“PSE revisited its voluntary delisting rules following receipt of complaints from the market that minority shareholders are essentially forced to accept a company’s decision to delist and the tender offer price offered by the listed company of delisting proponent, under the threat of being left with shares that have no secondary market,” the exchange said.
Under the draft rules, the delisting must be approved by all independent directors of the company. It must be cleared by stockholders owning at least 75 percent of the total outstanding and listed shares of the company and the number of votes cast against the delisting proposal should not be more than 10 percent of the outstanding and listed shares.
On the tender offer price, the PSE proposed a floor price that should not be lower than the highest value of the stock based on fairness opinion prepared by an independent valuation provider, the highest closing price of the stock in the six months before delisting announcement and the volume weighted average price of the stock for one year.
Two companies, both engaged in gaming business, were recently delisted from the local bourse. These were Travellers International Hotel Group Inc., which was delisted in August and Melco Resorts & Entertainment (Philippines) Corp. last year.
Both delistings earned complaints from minority stockholders because of the low tender offer price.
The current voluntary delisting rules only require a company to seek the approval of company’s incumbent directors after shareholders are informed of the delisting plan.
A tender offer is also required but the tender offer price is based on fairness opinion or valuation report.
A company planning to delist is also required to acquire at least 95 percent of the issued and outstanding shares of the company after the tender offer.
Concerned sectors may submit their comments on the proposed rules on of before December 10, 2019.