Bilyonaryo Manny V. Pangilinan is being urged to abandon Metro Pacific Investments’ (MPI) delisting plan and adopt the breakup strategy employed by U.S. industrial giant General Electric and billionaire Jack Ma’s Alibaba.
An anonymous top stockbroker in the country recommended that MPI divide its valuable assets by issuing property dividends to Metro Pacific Holdings (46 percent), GT Capital of the Ty family (17 percent), and minority shareholders (37 percent).
By distributing property dividends, all stockholders can profit from the company’s assets as if they had been sold at their fair value. In MPI’s case, shareholders will receive dividends in the form of stocks from the assets that will be spun off.
The source estimated that an MPI share could potentially be valued at around P9.50 each (excluding the parent company’s estimated debt per share of P2.32).
This figure is more than double the P4.63 tender offer price presented by Metro Pacific, GTCAP, and Mitsui of Japan to buy out minority shareholders and take MPI private. MPI has recently postponed the voluntary delisting as it reassesses the tender offer price, which many institutional investors consider inadequate.
“This alternative proposal follows the global standard practice of unlocking the value of undervalued holding companies for the benefit of both large and small shareholders,” the source stated.
Last year, GE CEO Larry Culp implemented a significant split of the conglomerate into three firms— aerospace, energy, and healthcare— with the aim of maximizing value for both controlling and minority shareholders.
In March, Chinese e-commerce conglomerate Alibaba announced its plan to divide into six units: Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics Group, Global Digital Commerce Group, and Digital Media and Entertainment Group, shortly after its co-founder billionaire Jack Ma resurfaced following a year-long absence.
GE and Alibaba pursued extensive corporate restructuring to realize the true value of their undervalued stocks just like MPI’s objective.
MPI’s subsidiaries with the highest potential breakup value are: 48 percent-owned Meralco at P6 per share; Metro Pacific Tollways (excluding CALAX, CCLEX, and connector roads) at P3.45 per share; 53 percent-owned Maynilad Water (mandated to conduct an initial public offering before 2027) at P1.50 per share; 20 percent of Metro Pacific Hospitals at 19 centavos per share; 50 percent-owned Philippine Tank Storage at 19 centavos per share; and 36 percent-owned Light Rail Transit-1 at nine centavos per share.
RELATED STORIES:
Bilyonaryo scoop confirmed: Mitsui to buy 20 percent stake in Metro Pacific through tender offer
Sogo shosha shopping: Metro Pacific soars amid rumors of Mitsui buy in, stock delisting
Prelude to buy-in? Metro Pacific, Mitsui commit $600M investments in PH
Who’s who in the Bongbong Marcos dinner meeting co-hosted by Metro Pacific and rumored investor Mitsui
From public to private: Metro Pacific has been discussing going private even before Mitsui’s rumored interest
