Gaisano to embark on backdoor listing

The Gaisano Group, the dominant retail chain in the southern Philippines, will do a backdoor listing on the Philippine Stock Exchange through listed mutual fund firm Filipino Fund Inc. (FFI).

In a disclosure to the Philippine Stock Exchange, FFI said the Gaisano’s Cebu-based retailing firm Vicsal Development Corp. has offered to purchase 16.1 million shares or 67 percent of FFI’s outstanding capital stock at P5.70 per share or a total of P91.77 million. FFI is majority owned by the Ayala Group.

In view of this development, the PSE will suspend trading of FFI shares tomorrow, July 28. The trading suspension, however, will be lifted the following day.

FFI sought voluntary suspension of trading of its shares to provide the public, especially existing FFI shareholders, information on the implication of the offer.

In a tender offer report filed with the Securities and Exchange Commission last Friday, Vicsal said it was making the tender offer to acquire the majority shares of FFI for possible business dealings in the future that would require the participation of a publicly-listed company.

Vicsal said it intends to maintain the status quo of FFI with regard to its corporate policies and practices.

"Vicsal has no specific plans or proposals for FFI which relate to or would result in an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving FFI or any of its subsidiaries," the company said.

The Gaisanos have been intending to list at the market since 2001, but poor market conditions prevented them from doing so.

Back-door listing is the faster and cheaper way to go public. Dormant stocks or firms whose shares have been least traded are targets for takeovers.

FFI is a closed-end investment company incorporated on May 9, 1991. The investment objective of the fund is to aim for long-term capital appreciation through investment in a portfolio of high-grade Philippine equity issues and, to a limited extent, marketable fixed income instruments and prime real estate.

The asset allocation of the fund is dependent on prevailing and anticipated market conditions.

At present, the Gaisano group operates two shopping malls in Davao, four department stores in Cebu, one store and one mall in Cagayan de Oro, and retail outlets in Iligan, Gen. Santos, Dumaguete, Misamis, Iloilo, and Tacloban.

The group intends to put five more Metro department stores and supermarkets in Cebu and Luzon over the next three years.