Lotte resumes tender offer to buy more PCPPI shares

Lotte Chilsung Beverage Co. Ltd. of South Korea resumed its tender offer to acquire additional shares in soft drink manufacturer Pepsi-Cola Products Philippines Inc. after filing an updated valuation and fairness opinion with the Securities and Exchange Commission.

PCPPI said in a disclosure to the stock exchange it received a letter from Lotte Chilsung regarding the new timetable for the tender offer period. 

Under the new schedule, the tender offer will be from May 20 to June 2. The tender shares will be crossed and settled on June 17.

Lotte Chilsung, which already owns 38.8 percent stake in PCPPI, started the tender offer in December to purchase shares in the soft drink manufacturer.

Under the plan, Lotte Chilsung offered to acquire up to 2.134 billion common shares, representing 57.78 percent of the company’s total issued outstanding capital stock at a price of P1.95 per share.

The price represents a 12.27-percent premium over the six-month volume weighted average price and a 6.14-percent premium over the three-month VWAP of PCPPI’s common shares. 

The SEC stopped the tender offer because P&A Grant Thorton which issued the fairness valuation on the tender offer is also providing bookkeeping services to two entities related to PCCPI.

“The MSRD finds that the business relationship of P&A Grant Thorton with the two entities, where PCPPI holds substantial shareholdings, could reasonably be perceived to undermine its independence to conduct and issue the fairness opinion,” the SEC said.

The SEC in April affirmed the independence of P&A as financial advisor to render the fairness opinion for the tender offer and concluded that there is “no reason to believe that P&A acted contrary Securities Regulation Code implementing rules and regulations”.

Lotte Chilsung views the tender offer as an opportunity for shareholders to sell their shares and potentially realize their investment.  

Lotte Chilsung said it is undertaking the tender offer as a strategic initiative that will enable it to acquire significant economic interest in PCPPI.  The Korean firm said in an earlier filing it had no plans to de-list PCPPI from the local bourse. 

The share price of PCPPI closed at P1.95 on May 22.