Minority shareholders of Keppel Philippines Holdings, which announced plans to go private on Friday at a 37 percent price premium, can be assured of a generous buyout for their shares, said Juan Paolo Colet, managing director at China Bank Capital.
“Some may see this delisting as another reflection of the state of our stock market, but we think it is commendable for the Keppel Group to take this route as the best move for its public shareholders,” he said in a text message.
“KPH stock has been trading at a steep discount to its net asset value for years. The delisting finally gives minority shareholders a very good opportunity to exit. It is a testament to the Keppel Group’s high standard of corporate governance that they made sure to treat their minority shareholders fairly by offering a generous tender offer price,” he added.
Premium price
KPH shares were voluntarily suspended on Friday and will resume trading on Monday to give stockholders ample time to digest the plan.
This deal contrasts with some past delistings, where minority shareholders were offered below what they deem to be the fair value.
KPH, which has risen more than 250 percent in the lsat (last) 12 months, will be privatized at P27.40, above its last closing price of P19.98 per share.
Traders’ gameplan
Colet advises traders on the sidles (sidelines) against chasing the price.
“The market price will adjust upward after the trading suspension is lifted on Monday, so those on the sidelines are unlikely to catch the big price jump,” he said.
“But from that point until the deadline of the tender offer period, if the market price is still sufficiently below the tender offer price, then some market players can take advantage of that arbitrage opportunity,” he added.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
