At the revised offer price of P5.20, shareholders would be able to tender their shares at a forward P\/E of 9.74x and at a forward P\/B of 0.70x, based on consensus 2023 estimates for EPS (0.53) and BVPS (7.46). These values are more or less in-line with MPI\u2019s 5Y mean P\/E and P\/B of 9.06x and 0.64x respectively. If we were to estimate a justified P\/B for the stock using an ROE of 8.4% (median FY15 to FY19 level), LT growth rate of 6.12% (based on a 72.5% retention rate aligned to pre-pandemic times), and a cost of equity of 9.6%, this would amount to a P\/B of 0.68x. <\/p>\n\n\n\n
Our View: <\/strong>Given the close proximity of the tender offer multiples to historical benchmarks from the past 5 years, as well as our estimate on MPI\u2019s fundamentally justified P\/B, this would add weight to the tender offer being much more fairly priced this time around. Our recommendation is to subscribe to the tender offer.<\/p>\n\n\n\n Pre-pandemic conditions not yet fully priced in<\/strong><\/p>\n\n\n\n On another note, the tender offer multiples still fall short of pre-pandemic levels (P\/E: 13.45x, P\/B: 1.11x) which indicates that the current tender price, while aligned with more recent valuation levels, still does not fully reflect more normalized conditions.<\/p>\n\n\n\n Still recommending to SUBSCRIBE<\/strong><\/p>\n\n\n\n Despite this, we would recommend that investors, especially those who were able to accumulate at the P4.00-mark, participate in the tender offer as its current price at the very least reflects sustainable expectations. Furthermore, even if shareholders were able to once again thwart management\u2019s attempt to delist, there is no guarantee that prices would be able to reach the tender offer\u2019s current mark which is a level that has not been seen since Sept. 2019.<\/p>\n\n\n\n