EDC Tender Offer – Will EDC be Delisted

What should I do with EDC’s Tender Offer? If EDC would be delisted soon, should I sell my stocks now?

I have been asked these series of questions lately and I have only answered just now. Sorry about that, I was under the weather… I’m just a mere mortal that gets sick sometimes. But since malakas kayo lahat saken, here are my personal views about EDC tender offer.

Note that these are only my personal views and insights based from my personal preference, too.

This may or may not apply to you because all of us are different even though all of us are investors.

All of us have different objectives and goals. All of us manage risks differently. All of us have different portfolios.

First what’s happening here?

First Gen Corp.(FGEN) is selling up to 31.5 percent of subsidiary Energy Development Corp. (EDC) to the consortium of investment fund managers managed by Macquarie Infrastructure and Real Assets (MIRA) and Arran Investment Pte Ltd of Singapore-based GIC for P64.5 billion.

FGEN entered into an agreement with Philippines Renewable Energy Holdings Corp., which offered to buy up to 8.9 billion common shares of EDC, its renewable energy unit, for P7.25 each.

The offer represents approximately 23.5 to 31.7 percent of EDC’s total outstanding voting shares. The tender offer will run from 9 a.m. on Aug. 10 until 12 noon on Sept. 18. It can extend.

For those who know me already, I prefer things simple and I’m more of a passive investor. So to answer the questions below, here they are:

What should I do with EDC Tender Offer?

With EDC’s Tender Offer, I recommend accepting the offer and sell UNLESS you are a major stockholder of EDC, that’s a different scenario.

Why would I accept the Tender Offer or sell?

Because I like things simple. With that 7.25 offer, I would gain already and considering the result of this Tender Offer, FGEN would benefit from it. If you have shares with FGEN, it could be a win-win for you.

I won’t care if I gain or not, I would still accept the offer. Why? Because like I said, I like things simple and I’m a passive investor.

If I would keep my EDC stocks, I won’t have peace of mind and anything that costs me my peace is freaking expensive. I do not want that 🙂

edc tender offer delisted

Because I’m a passive investor, I do not want to exert too much effort contemplating what’s gonna happen with my EDC shares if the company is delisted or if ever it remains.

Passive income is earning something without doing much effort. In this situation, I could earn few gains of money and some things money can’t buy.

Earning courage, managing risks, own decision making, peace of mind, experience and more besides.

Gain or not, I would still personally accept the Tender Offer or sell my stocks because of reasons number 2 and 3 below.

Will EDC be Delisted in the Stock Market?

For a company to be listed publicly in the Philippine Stock Exchange Index, it needs to maintain a public float of 15% or more.

With FGEN’s selling its 31.5% minority EDC subsidiary, this will definitely reduce EDC’s public float. EDC has a free float level of 49.28%. It is expected to go down to 12.5% or worse 10%.

If EDC is delisted in the PSE Index, its price will likely go down so sell or accept the TO. There is a buzz that it will be delisted in the market, too. But it is only a speculation.

What does it mean if a company is delisted in the Stock Market?

If you have shares with EDC and it’s delisted publicly, it’s not gonna be easy for you anymore to sell your stock in a click of a mouse or using a broker.

You would need to personally hire a security lawyer or comply with the SEC, file paper works or personally deal with your shares of stocks with EDC.

More accounting works for you, more dealing with people, more transactions, too.

I would have the pleasure to deal with those things if I’m a major stockholder, in this case I’m not.

Share your comments below and your decision with EDC. I’d like to hear them 🙂

About Fehl Dungo

Founder of DailyPik, entrepreneur, and tech investor. She has a Degree in Accountancy and background in Finance. She analyzes stocks everyday. Copy her trades on eToro Connect with Fehl on Facebook

46 thoughts on “EDC Tender Offer – Will EDC be Delisted”

  1. I’m just finding this out now and have 17k shares of EDC since I have forgotten to check my email and would check my portfolio once in a while only. Is it too late now? What should I do with these shares? I can still see EDC in Colfinancial so they are still public right? Thanks for the advice.

    Reply
  2. Hello po..plan ko sana ibenta so edc kc oddlot na sya so what I did I bought.an additional.stocks para mabuo yung boardlot tapos saka ko po sya ibenta..may bibili pa kaya ng stocks ko?

    Reply
  3. FGEN did NOT sell 31% of EDC, the MIRA/GIC consortium bought portions of the shares from all shareholders. The offer became oversubscribed so all of the participating investors were scaled back, including FGEN’s offer. FGEN only sold about 8% of its stake in EDC through the tender offer, it will maintain 41.6% economic, and 61% voting, keeping FGEN’s control of EDC. and yes, EDC will be delisted soon, this was publicly disclosed already. The controlling company will offer another tender offer to the remaining investors before delisting it so don’t worry.

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  4. Shouldn’t a Tender Offer apply to 100% of minority shares who want out? Is it legal to break this rule? Was there a precedent? Before they are delisted shudn’t they do a 2nd similar Tender Offer to protect us?

    Reply
    • It was not listed on the Terms and everything is regulated by the SEC so no rule has been broken. EDC has been removed today Sept. 28, 2017 from the PSEI but it is still available in the PSE so let’s see what happens

      Reply
  5. Hi Ms Fehl

    COL returned 526 shares after the EDC tender offer. Is there any way to dispose these shares as EDC boardlot is minimum of 1000. Any suggestions? Thanks!

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  6. Hi Ms Fehl,

    As per COL, not all EDC shares were bought in total and 15% of the shares were returned back to my portfolio. Is it advisable to sell this shares when the market opens tomorrow?

    Thanks

    Reply
    • Hi Fehl,

      I have the same question. I do not know what to do with the remaining 15% as my average cost for this has gone up (as compared to when I had them before the tender offer). It will slash my profit if I sell at this point. Hope you can enlighten us.

      Reply
      • Same question, what happens to the remaining shares? I can’t sell it anymore even at a loss because it’s “below the minimum board lot””

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          • Hi Ms. Fehl,

            How about in BDO Namura? How we can SELL below minimum board lot? Is there an option/

            Thank you very much and kindly regards,
            LEE

      • Unexpectedly, many people tendered their shares so the shares exceeded the maximum PREHC agreed to buy. The result was 15% shares had to be returned. You have 2 options now: sell or keep your shares. If you sell them, you may lose but you can avoid the hassles of having shares of EDC if natuloy na ma-delist na sya kasi bababa for sure ang price

        Reply
  7. Dear Ms Fehl,

    I tendered all my EDC shares (a little over 2500 shares) but i am concerned because i haven’t received word nor there is indication that ColFinancial debited these at the end of trading day today, 13th Sept., as promised in the email message i received earlier.

    Your insight please on this?

    Thank you.

    God bless.

    Jun

    Reply
  8. Hi Ma’am

    Question lang , ang price po niya ngayon is around 6.83 meaning po ba nito kelangn ko lang bumili before the offer period then ang broker na bahala? or kelangn namin isell pamin yon sa price na 7.25? sorry newbie

    Reply
  9. I called COL Helpdesk up and they confirmed that the possibility of all of the EDC shares of an individual investor being bought through this “Tender Offer” is at best 80-90%. My shares at the moment are market priced on average higher than cost – if I sell all of them now rather than wait for their decision on my Tender Offer (I offered all of mine) I will gain more if I sold now. What do you you suggest?

    Reply
    • I’m a little bit worried if that is the case, 10-20% unsold shares is already a considerable loss. Selling it at par is better than losing because of unsold shares, unless you bought it very cheap. I also don’t know what to do with mine.

      Reply
  10. EDC is still in the market. If i buy EDC on the last days of the deadline, is it sure it will be included in the tender offer? The price is 6.90 and the tender offer is 7.25. We can still make money even a bit kung sure yan. Also, when can we make hold of money after tender offer?

    Reply
  11. Thanks alot mam, fgen holder din kc ako.e n ur comments added confindence on me s hawak kong fgen
    Goblez u po n good health

    Reply
    • If I get it right, ‘scaled back on a pro rata basis’ means that IF (hopefully not) the total tendered shares is greater than 8.9B, they will return back the excess shares. As to how many shares will be returned to each investor depends on how much shares was tendered thus the term ‘pro rata.’

      For example, the total tendered shares is 9.0B shares at the target cross date. This means that there is an excess of 0.1B shares which is about 1% of the 8.9B ordered common shares. That equates to 1% of the shares tendered will be returned back to the investor. Let’s say you tendered 1000 shares, pro rated 10 shares (equivalent to 10 x P7.25 = P72.50) will not be bought from your original tendered shares.

      Reply
  12. Nag accept na ko sa tender offer. My average price is 5.9. Im just wondering if kelan ko makukuha ang pera ko? 🙂 :). Another question ko dito is sure kayang bibilhin nila lahat ng share na magpaparticipate sa TO? if Hindi, pano naman kaya nila pipiliin yung mga bibilhin nilang share at hindi bibilhin na share. Newbie here

    Reply
      • If you are using an online broker like most of us use here, I don’t think that would happen because your broker won’t post the TO anymore on your account if the Bidder has purchased all eligible shares completely. If you have no broker, then it’s possible coz you should know the updates about the TO

        Reply
    • The Tender Offer Cross Date is expected to be on Sept. 29. Settlement date is usually 3 trading days after the cross date. Your last question, I already answered on this thread din 🙂 Cheers!

      Reply
    • I think it’s good news for FGEN. Like I said, it will benefit FGEN. The proceeds will be used to minimize FGEN’s debts and expand their business. Tagal na ding di umaakyat ni FGEN baka heto na hinihintay naten haha I hope so 🙂 Naiinip nadin ako

      Reply

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