An investment bank hired by bilyonaryo Dennis Uy has justified the P6.11 strike price for the share swap which would enable the backdoor listing of his telecommunication business.
Multinational Investment Bancorp (MIB) released a “fairness opinion” on Uy’s plan to swap 11.2 billion shares of DITO CME, a publicly-listed shell company formerly owned by bilyonaryo Bobby Ongpin, with 10 billion shares of Udenna Communications Media and Entertainment Holdings, which holds Uy’s 60 percent stake in Dito Telecommunity (the third telco player), at an exchange price of P6.11 set four months ago.
MIB pegged DITO’s valuation at P6.2654 per share based on the “volume-weighted average share price per day for the month of October, and further weighted these prices by their corresponding trading volume.”
MIB valued Dito Telecommunity at P167.857 billion, with its spectrum awarded by the National Telecommunications Commission worth P154.274 billion.
“In the planned share swap transaction, Dito CME will only issue 1,120 shares for every UCME share, which is lower than what the company would otherwise issue following our valuation. Hence, we are of the opinion that the actual swap ratio of 1,120: 1 is advantageous to the shareholders of Dito CME,” said MIB.
Based on its closing price of P12 on March 10, Abacus Securities estimated that DITO would have a market cap of P168 billion – 2.8 billion shares outstanding plus the pending 11.2 billion shares in the swap.
Abacus Securities said that based on DITO’s 60 percent ownership of the third telco, this means that the new industry player would have a valuation of P280 billion.
This would make DITO the second largest telco on paper ahead of Globe Telecom P261.88 billion and slightly lower than the P288 billion market cap of PLDT.