full image - Repost: DoF: Possible IPOs for LandBank and DBP?; SEC makes power generation IPOs easier; RUMORS: Why did PLDT ditch Sky Cable?; Converge "swooping in"?; Aboitiz Group closes Coke PH deal (Monday, February 26) (from Reddit.com, DoF: Possible IPOs for LandBank and DBP?; SEC makes power generation IPOs easier; RUMORS: Why did PLDT ditch Sky Cable?; Converge "swooping in"?; Aboitiz Group closes Coke PH deal (Monday, February 26))
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Happy Monday, Barkada --The PSE gained 10 points to 6913 ▲0.1%Shout-out to Rat Race Running for suggesting MB as a "trusted source for business news/market intelligence", Darius IV for calling me a double agent of Bilyonaryo (you caught me, I was just writing a piece about how some starlet loves hanging out with her family), to Jojo, Jeffrey Lao, and echAir for the PNX4 meme appreciation, to Jing for confirming the post-cancellation Chaos amongst Sky Cable subscribers (and for liking the Friday's DUMB STUFF), to /u/minuvielle for pointing out that "PNX can't pay dividends but it gave its basketball team 3x bonus when it reached the semis", to /u/Real-Yield for speculating on whether the combined PSE and PDS will be renamed, to /u/taxms for wondering if "Davao Dennis" Uy is slow-walking for a bailout, and to arkitrader for the bright Friday vibes.▌In today's MB:DoF: look out for LandBank, DBP IPOsSEC makes power generation IPOs easierRUMORS:Why did PLDT ditch Sky Cable?Converge "swooping in"?Aboitiz Group closes Coke PH deal▌Daily meme | Subscribe (it's free) | Today's email▌Market Data▌Main stories covered:[NEWS] Department of Finance considering IPOs for LandBank and DBP... The Philippine News Agency reported that the Department of Finance (DoF) [link], under new Secretary Ralph Recto, is “exploring amendments to the charters of the Land Bank of the Philippines (LandBank) and Development Bank of the Philippines (DBP)”, which Mr. Recto said could include “their possible public listing, to broaden the local capital market.” No timelines on the charter amendment process or the subsequent IPO transactions were given.MB: I’m really curious about the purpose of this kind of IPO. From the perspective of the DoF, a couple of blockbuster banking IPOs could attract a good deal of new foreign investment capital into the Philippine capital markets. From the banks’ perspective, assuming the IPOs were primary shares, the transactions would bring in a good deal of fresh capital that could be used to expand their loan portfolios. The cash might also help replenish their financial statements after having been forced by law to remit ₱75 billion (LandBank gave ₱50 billion; DBP gave ₱25 billion) as seed capital to the Maharlika Investment Fund. From the local investor’s perspective, I’m not exactly sure what this offering would do. Local bank stocks have been doing very well and multiples are expanding, but our last “forced by law to IPO” bank offering was Bank of Commerce &BNCOM, which is currently down 48% from its March 2022 price of ₱12.00/share. Worth watching, but this still feels quite far away.[NEWS] SEC makes registration easier for power companies that are forced to IPO by law... The SEC issued a notice that simplifies the registration process for power generation companies and distribution utilities that are forced to IPO at least 15% of their shares under the EPIRA law. The SEC also gave an exception to the 20% minimum public float for new IPOs for companies that are forced to list under the EPIRA law, giving these firms the ability to list with just a 15% public float (matching the minimum that must be listed under the law).MB: Anything that reduces the bureaucracy and keeps the government from being a bottleneck is a positive in my book. I’m not a fan of laws that force companies to conduct public offerings (I don’t see the point of forcing a company to raise money other than to pad the SEC’s and PSE’s stats), and I’m not crazy about any laws that backslide on the PSE’s attempt to raise the minimum public float of the PSE’s companies over time, but I’m not going to let perfect be the enemy of good. Keep up the good work, SEC. More, more more![RUMORS] PLDT walked away from Sky Cable deal after banks refused to allow debt restructuring... I just want to be clear from the outset here that this is just a rumor, but what I’m hearing is that PLDT [TEL 1290.00 -0.6%] walked away from its deal to acquire Sky Cable from ABS-CBN [ABS 4.20 +0.7%] for ₱6.75 billion after banks would not agree to the terms of TEL’s plan to restructure Sky Cable’s debts. My source said that this wasn’t the only reason for the agreement’s unraveling, but that it was “one major factor.” In a second related rumor, Bilyonaryo reported a “Babbler” unnamed source [link] that Converge [CNVRG 9.78 -0.4%] is “swooping in to rescue SkyCable”, and that CNVRG’s interest in the company goes beyond just the broadband business and includes Sky Cable’s “pay-TV network”.MB: These are just rumors, but in a world where both rumors contain nuggets of truth, it will be interesting to see how CNVRG handles the issues that pushed TEL away from closing the acquisition. After all of the chaos, it’s hard to imagine that Sky Cable’s business has the same valuation that it did during the TEL deal, considering the number of subscribers that had already left in anticipation of the original sale that fell through. This might be a case where both parties get together to make some lemonade with all the lemons that they’ve been dealt. Or these rumors could just end up being big fat nothingburgers and something else happens that is entirely unrelated to everything I’ve just written about in this piece.[UPDATE] Aboitiz Equity Ventures closed transaction to acquire 40% interest in Coca-Cola PH... The takeover of Coca-Cola Beverages Philippines Inc. (CCBPI) by Aboitiz Equity Ventures [AEV 48.20 +1.8%] and Coca-Cola Europacific Partners (CCEP) has closed upon completion of “all conditions precedent” to the transaction. AEV and CCEP acquired 100% of CCBPI for $1.8 billion (~₱100 billion), with AEV coming out of the transaction with 40% beneficial ownership of the “leading beverage supplier in the Philippines”. According to AEV, CCBPI has a “wide supply chain footprint” with “73 production lines and 19 plants”.MB: There was nothing contentious here, just noting the completion of a deal that we first talked about back in August. This is apparently part of AEV’s push into the “branded consumer goods space.” As a non-Pepsi guy, I see the value in Coke products here. I just don’t love this move for a company with the political and economic capital that AEV has at its disposal. This tailwind won’t last forever, and it feels to me like the opportunity cost of this deal is considerable.MB is written and distributed every trading day. The newsletter is 100% free and I never upsell you to some "iNnEr cIrClE" of paid-membership perks. Everyone gets the same! 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