Pepsi starts tender offer to delist from PSE

PEPSI-COLA Products Philippines, Inc. (Pepsi-Cola Philippines) has started the tender offer of some 77.86 million common shares by Lotte Chilsung Beverage Co. Ltd.

In a Sept. 15 letter to the Philippine Stock Exchange, Inc. (PSE), Pepsi-Cola Philippines has formalized its application to delist its shares from the local exchange. The company first announced the decision on Sept. 10.

Lotte Chilsung, which bought 1.13 billion shares in the company earlier this year, is doing the tender offer of shares from Sept. 16 to Oct. 13. The shares are priced at P1.95 each.

To recall, Lotte Chilsung bought 1.13 billion shares or a 30.7% stake in Pepsi-Cola Philippines in June. The P2.21-billion transaction resulted in the deflating of the company’s public float to 2.1%.

The PSE’s minimum public ownership for listed firms is 10%. Breaking this threshold is a ground for delisting.

“In relation to the voluntary delisting and pursuant to the rules of the PSE on voluntary delisting, Lotte Chilsung is undertaking a mandatory tender offer to acquire the 77,858,236 (Pepsi-Cola Philippines) common shares held collectively by all common shareholders of the company,” it said.

The shares to be bought by Lotte Chilsung exclude those currently held by Lotte Corp. and Quaker Global Investments B.V.

In a Sept. 10 disclosure to the exchange, Pepsi-Cola Philippines said its board of directors decided to delist as it will not be able to comply with the minimum public ownership requirement given the “prevailing market conditions.”

Despite its delisting, Pepsi-Cola Philippines will remain the exclusive Philippine bottler of PepsiCo’s beverage brands Pepsi, Mountain Dew, 7-Up, Mirinda, Mug, Gatorade, Tropicana, Sting, and Aquafina.

Shares in Pepsi-Cola Philippines stopped trading on June 17. It closed at P1.70 apiece at the time.

The company posted a P162.39-million attributable net loss in 2019, a turnaround of its P71.1-million attributable net income the year prior, as its revenues dropped 7% to P7.7 billion. — Denise A. Valdez

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