Far East Holdings set to acquire Top Frontier shares for P10.86B

TOP FRONTIER Investment Holdings, Inc. has agreed to the subscription of shares by Far East Holdings Inc. valued at about P10.86 billion or an equivalent of around 13.5% of its current outstanding shares.

In a regulatory filing on Thursday, Top Frontier said the subscription agreement, which the two entered into on June 7, covers 45 million of its unissued common shares priced at P241.42 apiece.

The shares are to be fully paid in cash on or before June 30, 2023, or such other date as will be agreed upon by the transacting parties.

Far East Holdings is reportedly led by Ramon S. Ang, who is president and chief executive officer of Top Frontier.

In Top Frontier’s public ownership report disclosed on Thursday, Mr. Ang currently holds 75,887 common shares of the holding firm, making him the board director with the second-biggest shareholding at 0.02%, next only to the 59.96% of Iñigo U. Zobel, its chairman.

Top Frontier said it plans to secure approval from its shareholders on the issuance of the subscribed shares and the filing for their listing on the Philippine Stock Exchange.

Additionally, both companies have entered into an agreement for the amendments of the terms and conditions of the perpetual securities of Top Frontier.

This includes the change in the distribution rates and the inclusion of a convertibility feature of the perpetual securities into common shares of Top Frontier at a conversion price of P289.70 per common share.

“[These] amendments shall be effective on 20 June 2023 for the Perpetual Securities (Series “A”), 21 June 2023 for the Perpetual Securities (Series “B” and Series “C”), and 30 June 2023 for the Perpetual Securities,” Top Frontier said.

Top Frontier earlier said that the company’s board of directors approved the subscription of common shares, the appointment of authorized signatories for the transaction, and the issuance of the shares after the receipt of full payment.

Its board likewise approved the valuation of the company’s common shares based on the independent valuation conducted by FTI Consulting, Inc.

The independent report stated that at the low end, the company’s common shares are valued at P196.14 apiece, at the high end at P286.7 each, and at a midpoint at P241.42 apiece.

Top Frontier is the parent company and the owner of 61.77% or the controlling stake in San Miguel Corp. (SMC), one of the country’s largest listed conglomerates, as of April. Privado Holdings Corp. holds the second-biggest share at 15.67%.

SMC is engaged in industries such as beverage, food, packaging, property, fuel and oil, energy, infrastructure, and banking. Mr. Ang is also the president of SMC.

In the first quarter, SMC reported a net income of P17.7 billion, up 27% from P13.9 billion in the same period last year, due to broad-based growth in its business segments. Its top line for the three months hit P346.7 billion, up 9% from the same period last year.

Top Frontier shares fell by 0.16% or 20 centavos to P126.80 apiece on Thursday. — Adrian H. Halili