Philippine Airlines majority owner seeks to buy out minorities at huge discount

MANILA - Philippine Airlines (PAL) majority owner Lucio Tan is offering to buy out minority shareholders in PAL Holdings Inc, the carrier's parent company, at 1.19 pesos per share, less than a quarter of the stock's current market price, regulatory filings showed.

Shares of PAL Holdings were down 0.2 per cent at 5.30 pesos (S$0.07) as of 5.43am on Wednesday, as the voluntary tender offer began.

The offer runs until Nov. 19 and follows Tan's US$1 billion (S$1.27 billion) deal to acquire San Miguel Corp's 49 per cent stake in PAL Holdings. With a free float of just 10.22 per cent and a market value of around US$3 billion, Tan currently owns about 90 per cent of PAL Holdings.

Tan is also offering to buy out minority shareholders of the unlisted flag carrier, which is about 98 per cent-owned by PAL Holdings, at 0.31 pesos per share.

PAL Holdings management hasn't recommended shareholders accept Tan's offer, and said on Monday it intends for the company to remain publicly listed despite the tender offer.

"In the event that at the conclusion of the tender offer, the exchange's 10 per cent minimum float requirement is breached, the company shall undertake the necessary measures to comply with the rules," it told Manila's stock exchange.