Stock Commentary

Premium Leisure suspended after successful tender offer

Merkado Barkada
Premium Leisure suspended after successful tender offer

The PSE suspended Premium Leisure Corp [PLC suspended] [link] for a minimum public ownership violation after a successful tender offer by Belle Corp. [BEL 2.08, up 4.0%; 36% avgVol] took 6,172,192,242 shares of PLC off the market and reduced PLC’s public float to just 0.45%. BEL disclosed that it owns 99.55% of PLC’s outstanding shares after the tendered shares were crossed and settled. The tender offer price offered by BEL for PLC shares was P0.85/share, which was a 15% premium to PLC’s pre-announcement price, but was an 8% discount to the market price after traders learned of BEL’s intent to conduct a tender offer for PLC shares and delist the company.

MB bottom-line: All BEL had to do was get 95% of PLC’s outstanding shares to delist, so “mission accomplished.” BEL will now go through the process of delisting PLC from the stock exchange. Any PLC shareholders that did not tender their shares to BEL during the tender offer process still own their PLC shares today, and will still own their PLC shares when PLC is delisted. The only difference is that PLC will be a privately held company, and there will be no easy public market to facilitate the buying and selling of its shares. Admittedly, that’s a huge difference, and the threat of being made into a private company shareholder is one of the more compelling parts of any tender offer sales pitch. 


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