Mitsui, Japan gov’t-backed fund to buy into Philippines’ Metro Pacific

April 27, 2023 - 11:41 AM
PSE bldg
In this May 10, 2022 photo, the external display of the Philippine Stock Exchange building in Taguig City shows PSEi's closing a day after the 2022 presidential elections. (Philippine Stock Exchange/Released)
  • Japanese firms, top shareholders partner for tender offer, delisting
  • Metro Pacific to continue managing assets, investing
  • Philippine brokerage firm warns of low tender offer price

MANILA — Mitsui & Co Ltd and a Japan government-backed fund announced plans on Thursday to buy a minority stake in Philippine infrastructure firm Metro Pacific Investments Corp, as it delists from the domestic stock exchange.

Metro Pacific, a unit of Indonesian tycoon Anthoni Salim’s First Pacific Co Ltd, has long been a target for strategic investment and privatization owing to its cheap valuation on the Philippine bourse.

In a statement, Mitsui said it partnered with JOIN, a government-backed fund that supports Japanese firms’ overseas infrastructure projects, to acquire 20% of Metro Pacific valued at $477 million.

The Japanese firms and existing majority stockholders will launch an offer to buy out minority shareholders owning a combined 36.6% stake, Metro Pacific said in a disclosure, adding the company will be delisted from the bourse.

The tender offer price is 4.63 pesos ($0.08) per share, an 8% premium versus Wednesday’s closing price and a price level last reached three and a half years ago, and will cost the buyers around $873 million.

“The bidders feel that the intrinsic value of Metro Pacific’s core investments in infrastructure in the Philippines has not been fully reflected in its share price for some time,” parent firm First Pacific said in a statement.

Metro Pacific, which has interests in power, water, hospitals and toll roads, said it will continue owning and managing its portfolio and invest in other sectors of the economy in the Philippines and Southeast Asia.

Meanwhile, COL Financial, the Philippines’ largest online stock brokerage firm, advised investors not to sell shares in Metro Pacific.

While 4.63 pesos is 22% above Metro Pacific’s one-year volume-weighted average price, it is a 54% discount to the firm’s net asset value, April Lee-Tan, head of research at COL Financial, said in a note.

($1 = 55.75 Philippine pesos)

Reporting by Neil Jerome Morales in Manila and Kantaro Komiya in Tokyo; Editing by Kanupriya Kapoor