First Pacific revamp forces Salim buyout bid

PUBLISHED : Tuesday, 02 May, 2006, 12:00am
UPDATED : Tuesday, 02 May, 2006, 12:00am

First Pacific completed a $1.74 billion internal restructuring last week that saw its chairman boost his control in the Southeast Asia-focused conglomerate to 44.48 per cent at a time when the stock's valuation has recovered to a four-year high.

At the same time, the parent firm of Philippine Long Distance Telephone and Indonesia's Indofood said in a stock exchange announcement yesterday that a wholly owned unit of chairman Anthoni Salim was making a mandatory conditional cash offer for all the outstanding shares in First Pacific, although he had no intention to delist the company.

The takeover bid at $2.20 per share - a 32.3 per cent discount of its pre-suspension share price at $3.25 - was triggered after Mr Salim boosted his voting rights in the company to 44.48 per cent from 18.96 per cent with the restructure.

A company source said yesterday that it was merely a 'compliance offer' because Mr Salim's personal stake had exceeded 30 per cent.

'Given the big discount, there is no expectation [from Mr Salim] that anyone would tender the shares. It's a technical offer made in compliance of the takeover code that he was obliged to make,' the source said.

The reorganisation involved Mr Salim buying shares in two private companies held by his father Soedono Salim, who is also the chairman of Indonesia's biggest conglomerate Salim Group, and other shareholders.

The $2.20 offer price values First Pacific at about $7.02 billion. Assuming all outstanding shares were bought out, Mr Salim would have to pay a maximum $4.18 billion.

'The offerer intends to maintain the listing of the shares on the stock exchange,' the company said in the exchange announcement.

The offer will lapse if Mr Salim fails to get more than 50 per cent of the voting rights 21 days after it being made.

Mr Salim's boosting of his stake follows a turnaround in First Pacific's fortunes in recent years since it was taken out of the Hang Seng Index and its share price dropped to a record low of 72 cents.