Macay Holdings to purchase RC Global Beverages
Macay Holdings [MACAY 4.59] [link] was suspended by the PSE after it announced that its board has voted to acquire RC Global Beverages (RC Global), which owns “global licensing rights to RC Cola and associated brands in over 100 countries (excluding US, Mexico and Canada)”.
Who owns RC Global? The Yao Family, the same group that owns MACAY.
How much will MACAY pay? MACAY said that it would pay US $21 million in cash, plus the assumption of $26 million in RC Global's debt. The final purchase price will be subject to RC Global's 2022 performance.
When will the suspension lift? Once MACAY provides comprehensive disclosure on its plan to acquire RC Global. The PSE suspended MACAY under the Substantial Acquisition Rule, which requires a company to provide comprehensive disclosure for any transaction with a value greater than 10% of the acquiring company’s book value.
Why does the PSE suspend a stock like this? This rule is in place to allow investors the chance to learn more about the financial background of the company or assets acquired, and to hear from the horse’s mouth how the acquisition will impact the company’s earnings and strategy going forward. Without this kind of pause, insiders and those in their orbit (professionals, family members, etc) would always be in a position to use their understanding of the deal and their data to front-run the retail traders who would be forced to react only to headlines.
MB BOTTOM-LINE
MACAY minority holders will probably want to know a lot more about the transaction, as the possibility for conflicts of interest are everywhere with Mazy’s Capital (owned by the Yao Family) being on both sides of the transaction.
Is assuming RC Global's US Dollar-denominated debt in the best interests of MACAY’s minority shareholders?
It might be in the Yao Family’s best interest, but without further data, we don’t have enough info to know if the deal is good for the rest of us.
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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.
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