Philippine Airlines tycoon Tan to buy out minority investors in listed parent

[MANILA] Philippine Airlines (PAL) owner Lucio Tan plans to buy out minority shareholders in parent PAL Holdings Inc at a discount to the listed firm's current market price, a senior airline official said on Friday.

The voluntary tender offer comes hard on the heels of business tycoon Tan's US$1 billion deal to acquire San Miguel Corp's 49 per cent stake in PAL Holdings. With a free float of 10.22 per cent and a market value of US$3 billion, PAL Holdings controls around 90 per cent of Asia's oldest airline.

The tender offer price, which will be announced next week, will be lower than current levels, PAL General Manager Jaime Bautista told Reuters by telephone. "We are already in control but if the minority is willing to sell, we will commit to buy them out at the same economic terms that was agreed with San Miguel," Bautista said, adding the tender offer will be completed next month.

The valuation used to acquire San Miguel's shares is lower than the present market price, Bautista said. Following a brief trading suspension early on Friday, shares in the thinly traded stock rose as much as 3.3 per cent to 5.60 pesos (US$0.1247) apiece, in a largely flat market.

In a stock exchange filing, PAL Holdings said it has received a notice of voluntary tender offer from two Tan-led companies.

Last month, the Tan group purchased San Miguel's 49 per cent stake in Trustmark Holdings Corp, which owns 89.78 per cent of PAL Holdings.

The flag carrier is considering delaying delivery of Airbus planes it has on order as it reviews operations after the Tan group resumed management control. REUTERS