FREE Special Report: About the EDC Delisting and Tender Offer

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Our Partner Broker’s Analysis

The Tender Offer

The Bidder, Philippine Renewable Energy Holdings Corporation, has agreed to acquire up to (and only up to) 8.9 billion common shares from shareholders of EDC through a tender offer. The Tender Offer is for up to 31.7% of the outstanding voting shares of EDC.

The Bidder is offering a price of PHP 7.25/share to EDC shareholders. This is at a premium of 21.8% over the last closing share price of PHP 5.95/share, 21.5% premium over the 3-month VWAP and a 21.5% premium over the 6-month VWAP.

First Gen Corporation (FGEN) and Northern Terracotta Power Corporation (NTPC), a wholly-owned subsidiary of FGEN, will participate in the Bidder’s voluntary tender offer by tendering 1.97 billion common shares (10.6% of outstanding shares).


(Related stock report you should be reading: Which stock could replace EDC in the PSE index (PSEi)?)


The Bidder

Philippine Renewable Energy Holdings Corporation is a consortium of investors comprised of funds managed by Macquarie Infrastructure and Real Assets (MIRA) and Arran Investment Pte. Ltd. (Arran), an affiliate of GIC Pte Ltd (GIC).

MIRA is the world’s largest infrastructure asset manager with more than 20 years’ experience. Its businesses provide essential services to over 100M people around the globe daily. They managed the first and largest Philippines infrastructure fund which has committed approximately $500 million across six Philippines infrastructure investments since 2012.

GIC is a leading global investment firm with well over $100B in assets under management. As Singapore’s sovereign wealth fund, a key strength is its experience and ability to invest in quality companies globally for the long term. It has a strong track record of infrastructure investments in the emerging markets, and has a direct portfolio of over 5GW in renewable energy assets globally.


Purpose of the Tender Offer

To provide an opportunity for shareholders to realize their investment at a significant premium to the current share price. This will support the long-term growth of EDC. The tender offer will likewise form a long-term strategic partnership between the Bidder and the Lopez Group, and opens a door for a potential delisting of EDC in the future.


Potential delisting

This will minimize the disruption to the EDC’s operations and enable the Bidder and tendering shareholders to finalize the transaction efficiently, the Bidder is offering to acquire up to (and only up to) 8.9 billion common shares. The Bidder and FGEN intend to eventually delist, or undertake the necessary actions that will lead to the delisting of EDC.

If successful, the Bidder and FGEN expect to pursue all funding options in support of EDC’s strategy. This may include reinvesting a greater proportion of earnings into the business. This may include increasing the leverage of EDC to optimize capital structure and fund future growth.

(Related stock report you should be reading: Which stock could replace EDC in the PSE index (PSEi)?)


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AB Capital Securities

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