The regulator of the Philippine Stock Exchange is to look into whether minority public shareholders in Suntrust Home Developers Inc should have been given the chance to tender their stock and exit in return for a cash offer, prior to Suntrust being taken over by Suncity Group Holdings Ltd. The latter is a Hong Kong-listed vehicle controlled by Alvin Chau Cheok Wa, the boss of privately-held Macau VIP junket Suncity Group.
According to an October filing by Suntrust, the firm is to be involved in development and operation of a Manila casino project known as “Westside City Resorts”, on land near Manila Bay in the Philippine capital.
The Philippine Inquirer news outlet carried on its website on Monday comment from Arman Pan, secretary of the Securities and Exchange Commission (SEC) in the Philippines, saying the body was “aware of questions raised over the non-conduct of a mandatory tender offer for the minority shareholders of Suntrust Home Developers Inc following the acquisition by Suncity Group [Holdings] of control of the listed company”.
The news outlet said – citing a SEC source it did not identify – that the body had issued subpoenas to the Philippine Stock Exchange for it to submit certain records of trades relating to Suntrust during the period prior to the entry of Suncity Group Holdings.
According to a recent filing from Suntrust, Suncity Group Holdings has already completed the acquisition of a 51-percent stake in the target firm. The deal was first announced in October, in connection with Suntrust’s Westside City Resorts project announcement.
Under chapter 19 of SEC rules regarding tender offers, “any acquisition that would result in ownership of over 50 percent of the total outstanding equity securities of a public company, the acquirer shall be required to make a tender offer… for all the outstanding equity securities to all remaining stockholders of the said company at a price supported by a fairness opinion provided by an independent financial advisor or equivalent third party”.
According to the Inquirer report – citing SEC’s Mr Pan – Suntrust has said there were no circumstances triggering the need for a tender offer because Suncity Group Holdings acquired control of Suntrust on the open market.
Whether the circumstances involved could be classified as an open-market transaction would be the topic for examination, said Mr Pan.
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”Our own consensus is that any newcomers to this [junket] sector should be corporatised, and should be financially sound and able to commit a higher guarantee deposit”
Kwok Chi Chung
President of junket trade body, the Macau Association of Gaming and Entertainment Promoters