‘Wag kayong sumakay! GMA not compelled to make tender offer, buying only 10% of foreign-held PDRs

GMA Network Inc. is adamant it is not obligated to make a tender offer to Filipino holders of is Philippine Depository Receipts because its buyout offer is only for foreign investors.

GMA was responding to a query by the Philippine Stock Exchange on whether Rule 19 of the Implementing Rules and Regulations of the Securities Regulation Code should apply to its offer to buy its PDRs from the market for no more than P4.55 each.

GMA claimed that its PDR buyout was not covered by Rule 19 which required a buyer to make a mandatory tender offer when he or she would purchase at least 35 percent (or even under 35 percent if the resulting ownership by the acquirer is more than 51 percent) of the targeted listed company.

GMA said it was only buying the 75.093 million PDRs held by foreigners or 10.43 percent of the outstanding GMA PDRs. If it does buy out all the foreign-held PDRs, GMA said the coverted shares would only be equivalent to 2.23 percent of the network.

GMA stressed it was not acquiring its own shares but PDRs (which give holders the right to buy GMA shares) and that the buyout would only last two and half months up to October 31, 2020.

The buyout price was capped at P4.55 (the share’s lowest price in five years) “to ensure that the proposed acquisition of such PDRs by GMA Network, Inc. will not affect the future price of PDRs.”

GMA claimed that the buyout was meant to “protect” non-Filipino owners of PDRs after the House of Representatives Committee on Legislative Franchises’ stunning rejection of rival ABS-CBN’s application for a new franchise for violations and abuses, specifically its issuance of PDRs which breached the constitutional ban on foreign ownership in media companies.

“The directors do not have any personal interest, whether direct or indirect, in the transaction. The proposed offer is an act of good faith on behalf of the orporation to protect non-Filipino PDR holders whose holdings might be affected by the (House) findings…Since this is an offer to purchase/acquire, the prerogative to sell lies with the PDR holders who are eligible to sell their PDRs. All the rights of the PDR holders, whether Filipinos or non-Filipinos, are not prejudiced,” said GMA.

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