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NEWS UPDATES 28 October 2009

Japanese firm acquires 34% stake in Philippines’ Mabuhay Vinyl

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Philippine tycoon Henry Sy’s Banco De Oro Unibank Inc is selling its 34-percent stake in Mabuhay Vinyl Corp to Tosoh Corp of Japan, allowing the multinational company to take over majority control of the local chemical manufacturer, reported Philippine Daily Inquirer.

In a disclosure to the Philippine Stock Exchange yesterday, BDO said it agreed to unload 234.6 million shares in the company at 1 peso each. (1$=48 peso)

Shares of Mabuhay Vinyl surged 50 percent to 0.90 peso, hitting the maximum daily price increase allowed in the local bourse, as investors bid up the shares in anticipation of a tender offer by Tosoh at the same terms with BDO. Tosoh issued a notice yesterday announcing that it would indeed offer to buy out other stockholders of Mabuhay Vinyl.

BDO, the country’s biggest bank in assets, agreed to sell its shares so it could focus on its core banking businesses.

“We are an accidental owner of [Mabuhay Vinyl] as part of a loan settlement. While the business is sound, it has always been our strategy to focus on our core business,” BDO president Nestor Tan explained yesterday (October 27, 2009).

Once the buyout is completed, Tosoh will raise its stake in Mabuhay Vinyl to 67.7 percent. Other minority shareholders with the option to accept Tosoh’s tender offer are Metro Alliance Holdings & Equities Corp. (3.9 percent); Asaje Realty Corp. (3.85 percent) and Mitsubishi Corp. (5.7 percent).

Tosoh is a global supplier of inorganic chemicals, petrochemicals, and specialty materials supporting the semiconductor, pharmaceutical, healthcare and food, and many other industries. The group comprises 136 companies globally and more than 50 of those firms are located outside Japan. It employs more than 11,000 people and generates net sales of approximately $7.4 billion.

Mabuhay Vinyl, which has a market capitalisation of 413 million peso based on yesterday’s closing price, has 34 percent of its shares held by the public. The company was previously led by the family of “plastics” king Willian Gatchalian.

The company had total assets of 1.83 billion peso as of end-June. Based on its latest financial results, Mabuhay Vinyl posted a net income after tax of P12 million in the first six months as against 18.98 million peso a year ago.


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