Minor stockholders hits San Miguel’s tack on Petron
01/13/2009 | 03:04 AM
MANILA, Philippines - San Migual Corp. must offer to buy out minor stockholders of Petron Corp. even if it is only acquiring majority of the oil refiner indirectly through another company, experts said Monday.
A number of minority stockholders are in fact planning to question the absence of an offer from the food and beverage giant before the Securities and Exchange Commission (SEC), the lawyer representing one of the shareholders said.
Lawyer Reynaldo G. Geronimo from the Romulo Mabanata Buenaventura Sayoc & de los Angeles law firm said he had been approached by a Petron shareholder who was concerned that San Miguel might be avoiding the so-called tender offer rule.
"Some stockholders have asked me to study the matter," the lawyer said in a telephone interview, adding that several stockholders were planning to band together to raise the issue before the corporate regulator. He said San Miguel should offer to buy the minor owners’ stake in Petron at P6.85 per share — the price the Conjuanco-led company was likely to pay for more than 50% of the oil firm despite all the "nice legalities" it was exercising.
The law, Mr. Geronimo added, is meant to protect minority shareholders.
San Miguel, which has evaded questions on its acquisition plan for Petron, managed to install its representatives to the Petron board, a move that analysts find absurd if what it had signed with the major stockholder was a mere option deal.
"What is clear right now is that on the one hand, [San Miguel] has an option agreement with Sea Refinery but on the other hand, San Miguel already has [three] board seats in Petron," Peter C. Lee of IGC Securities, Inc. said.
Mr. Geronimo said San Miguel should disclose the contents of its deal with Ashmore unit Sea Refinery Holdings BV, which gives it the option to buy all of Sea Holdings’ interest in SEA Refinery Corp. which owns a major stake in Petron.
Efforts to reach San Miguel officials were again unsuccessful. One of its representatives to the Petron board, laywer Estelito P. Mendoza, denied being privy to the deal. "I was just informed that I am already part of Petron’s board," an annoyed Mr. Mendoza said in a phone interview.
The former solicitor general, along with San Miguel Vice-Chairman Ramon S. Ang and Chairman Eduardo M. Cojuangco, Jr. were appointed to the Petron Board on Friday. Mr. Ang is now Petron’s chairman and chief executive officer.
Still on San Miguel’s lack of a tender offer, Mr. Geronimo cited a Supreme Court ruling that favored minor shareholders of Union Cement Corp. who questioned buyer Cemco Holdings, Inc.’s failure to offer to buy them out.
The Supreme Court ruled that the "indirect acquisition by Cemco Holdings of 36% of listed Union Cement’s shares through Cemco’s acquisition of the non-listed Union Cement Holdings, Inc.’s shares is covered by the mandatory tender offer rule."
The decision expanded the coverage of the tender offer rule, which requires companies that acquire up to 35% of a listed firm to offer to buy the shares of minor shareholders at the same price.
"But if San Miguel exercises the option agreement, then it should conduct a tender offer to the shareholders," Eagle Equities, Inc. President Joseph Roxas said.
Mr. Geronimo noted that if San Miguel tries to avoid a tender offer, minority shareholders of Petron should ask the SEC to sanction the company, which "has flagrantly violated the spirit of the law." — Kristine Jane R. Liu
A number of minority stockholders are in fact planning to question the absence of an offer from the food and beverage giant before the Securities and Exchange Commission (SEC), the lawyer representing one of the shareholders said.
Lawyer Reynaldo G. Geronimo from the Romulo Mabanata Buenaventura Sayoc & de los Angeles law firm said he had been approached by a Petron shareholder who was concerned that San Miguel might be avoiding the so-called tender offer rule.
"Some stockholders have asked me to study the matter," the lawyer said in a telephone interview, adding that several stockholders were planning to band together to raise the issue before the corporate regulator. He said San Miguel should offer to buy the minor owners’ stake in Petron at P6.85 per share — the price the Conjuanco-led company was likely to pay for more than 50% of the oil firm despite all the "nice legalities" it was exercising.
The law, Mr. Geronimo added, is meant to protect minority shareholders.
San Miguel, which has evaded questions on its acquisition plan for Petron, managed to install its representatives to the Petron board, a move that analysts find absurd if what it had signed with the major stockholder was a mere option deal.
"What is clear right now is that on the one hand, [San Miguel] has an option agreement with Sea Refinery but on the other hand, San Miguel already has [three] board seats in Petron," Peter C. Lee of IGC Securities, Inc. said.
Mr. Geronimo said San Miguel should disclose the contents of its deal with Ashmore unit Sea Refinery Holdings BV, which gives it the option to buy all of Sea Holdings’ interest in SEA Refinery Corp. which owns a major stake in Petron.
Efforts to reach San Miguel officials were again unsuccessful. One of its representatives to the Petron board, laywer Estelito P. Mendoza, denied being privy to the deal. "I was just informed that I am already part of Petron’s board," an annoyed Mr. Mendoza said in a phone interview.
The former solicitor general, along with San Miguel Vice-Chairman Ramon S. Ang and Chairman Eduardo M. Cojuangco, Jr. were appointed to the Petron Board on Friday. Mr. Ang is now Petron’s chairman and chief executive officer.
Still on San Miguel’s lack of a tender offer, Mr. Geronimo cited a Supreme Court ruling that favored minor shareholders of Union Cement Corp. who questioned buyer Cemco Holdings, Inc.’s failure to offer to buy them out.
The Supreme Court ruled that the "indirect acquisition by Cemco Holdings of 36% of listed Union Cement’s shares through Cemco’s acquisition of the non-listed Union Cement Holdings, Inc.’s shares is covered by the mandatory tender offer rule."
The decision expanded the coverage of the tender offer rule, which requires companies that acquire up to 35% of a listed firm to offer to buy the shares of minor shareholders at the same price.
"But if San Miguel exercises the option agreement, then it should conduct a tender offer to the shareholders," Eagle Equities, Inc. President Joseph Roxas said.
Mr. Geronimo noted that if San Miguel tries to avoid a tender offer, minority shareholders of Petron should ask the SEC to sanction the company, which "has flagrantly violated the spirit of the law." — Kristine Jane R. Liu
