DMCI Holdings [DMC 10.86 ?0.7%; 52% avgVol] [link] and Semirara Mining and Power [SCC 32.50 ?0.8%; 22% avgVol] acquired Cemex Asian South East Corp (CASEC), the parent company of Cemex Philippines [CHP 1.36 ?28.4%; 267% avgVol], in a deal worth $305.6 million (~P17.6 billion). CASEC owns 89.86% of CHP. The deal valued CHP at P1.42/share, and will result in a mandatory tender offer for the remaining 10.14% of the public float.MB BOTTOM-LINE: This deal is going to burn a lot of speculators who jumped in over the past couple of months to try to front-run a tender offer for CHP shares. CHP’s price rose from around P0.90/share in early February to around P2.10/share over the course of two weeks, and stayed there (relatively speaking) until the price collapsed 40% a few days before this deal was announced. But this is where things get interesting, because the Consunji Family (the owners of DMC, SCC, and Dacon Corp, the other member of the purchasing group) has said that it intends to keep CHP listed. By law the purchasers must conduct a tender offer, but with the acquisition price so low and the stock only 0.14% above the minimum public ownership threshold, speculators are going to be faced with a complicated game of chicken. If just 19 million shares are sold in the tender offer (~P26.8 million worth), CHP would fall below the minimum public ownership threshold and face delisting unless the buyer group sells some shares to a third party buyer. I think it’s interesting that the group has nominated the only private company in the buyer group (Dacon) to be the tender offer bidder. Perhaps that gives the family enough wiggle room to make some quick deal and offload a small chunk of shares in a private sale to preserve CHP’s listing integrity?
