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Stock Commentary

Premiere Horizon Alliance board approves “minimum” acquisition of 33% of SquidPay

Merkado Barkada
Premiere Horizon Alliance board approves âminimumâ acquisition of 33% of SquidPay

The board of directors meeting disclosure said that Premiere Horizon Alliance’s [PHA 0.83 2.47%] board had approved the acquisition of at least 33% of SquidPay, Marvin Dela Cruz’s mysterious fintech company, in accordance with the agreements signed in connection with Mr. Dela Cruz’s takeover of PHA through a very slow backdoor listing.

The disclosure also notes that the target completion date to be within the next 6 months, with the final terms and conditions of the acquisition coming after “additional due diligence” and the results of its “ongoing third party valuation report”.


MB BOTTOM-LINE

 I’ve ranted about this transaction many times in the past. I’m a huge supporter of fintech (don’t bet against the BSP), and I think that we need more single-purpose listed tech companies on the PSE.

That said, this transaction has never felt as transparent and straight-forward as Mr. Dela Cruz’s tweets would have us believe. My big issue has always been that the language of the original agreement only contemplates the possibility of SquidPay’s assets being used as payment for PHA’s shares; the agreement doesn’t require those assets to be injected, and it was (and still is) entirely possible for Mr. Dela Cruz and his investor pals to satisfy the terms of the agreement without putting any of SquidPay into PHA.

Now, with this disclosure, we learn that PHA’s board has instructed the executive committee to acquire a minimum of 33% of SquidPay, but then what? If PHA only owns 33% of SquidPay, then we’ll never get a chance to see its actual financials incorporated into PHA’s earnings reports, like when DITO only held a minority stake of Dito Telecommunity.

There are a lot of questions about SquidPay’s growth that PHA’s full acquisition of SquidPay would help answer, but until PHA completes the acquisition of a majority stake, investors are still just left trying to piece it together with media hits and tweets.   

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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.

PHILIPPINE STOCK EXCHANGE PREMIERE HORIZON ALLIANCE CORP.
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