Araneta seeks exemption from tender offer rule

After buying majority stake in Philweb

MANILA, Philippines - Businessman Gregorio Ma. Araneta III is seeking exemption from the mandatory tender offer requirement in relation to his acquisition of businessman Roberto Ongpin’s stake in PhilWeb Corp.

In a disclosure to the Philippine Stock Exchange (PSE), PhilWeb said the parties involved in the transaction are now seeking approval from the Securities and Exchange Commission (SEC) for the exemption.

A source from the SEC’s Market Regulations Department, however, said the transaction was covered by the mandatory tender offer requirement under the Securities Regulation Code (SRC).

 The SRC requires mandatory tender offers when a person or group of persons intends to acquire 35 percent of the outstanding voting shares of a public company in one or more transactions within a period of 12 months.

Ongpin sold his 53.76 percent stake in PhilWeb, equivalent to 771.65 million shares, at P2.60 per share or a total of P2 billion.

According to the sale and purchase agreement, the sale will be in two tranches.

 The first tranche of 653.15 million shares will completed through a special block sale and for approval by the PSE, while the second tranche will consist of 118.5 million shares that need to be registered for listing at the PSE.

The second tranche is scheduled as soon as the registration of these shares at the PSE is completed and will be transacted at the same price as the special block sale for the first tranche.

  Araneta was elected chairman of PhilWeb in September while Dennis Valdes remains as president of the company. He is the second largest shareholder of PhilWeb and has been a director of the company for a number of years.

 Ongpin resigned as chairman of PhilWeb in August after President Duterte singled him out as an oligarch who must be destroyed.

 With the divestment of Ongpin, the new management of PhilWeb will now reapply for the continuation of its license with Pagcor for its nationwide network of e-Games cafes.

e-Games are internet cafes exclusively dedicated to casino games. With technology provided by PhilWeb, patrons can choose from more than 300 casino games, including baccarat, blackjack, various slot machine games, video poker and sports betting.

 There were about 268 operating e-Games cafes across the country, majority of which were owned and operated by independent entrepreneurs.

The e-Games network had at least 5,000 employees.