• From iRipple to Alterra

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    Emeterio Sd. Perez

    Emeterio Sd. Perez

    On September 23, businessman Alfonso Anggala sold 1.557 million of the shares he owned in iRipple Inc. at P43.819 each, for a total of P68.226 million. From the sale, he made a gross profit of P21.889 per share, or a total of P34.083 million.

    Six months earlier on March 12, Anggala teamed up with fellow businessman Conrado Rafael Alcantara and paid the Javier group P305.488 million, or P21.93 per share, for their 13.933 million iRipple shares, which represent 89.49 percent of 15.569 million outstanding shares.

    In taking over majority control of iRipple, Alcantara ended up indirectly owning 7.084 million shares, or 45.50 percent, and Alfonso, 6.849 million shares, or 44 percent.

    Aside from Victor Javier, the other sellers who belonged to his group were KLG International Inc., Hubert Dy, William Yao, Edward Lee, Annie Chew Guay Choon, Benedicto Agasid, Lea Marianne Ang, Annie Chua and Joanna Go.

    Tender rejected
    The public, being outsiders, can only speculate on the new owners’ acquisitions. In the case of iRipple, Alcantara and Anggala had said in regulatory filings they would rename it Alterra Capital Partners Inc., which they would use as a holding company.

    A “holding company” sounds more pleasing to the ear than does a “software solution provider,” which is the nature of what iRipple has been undertaking as provided for in the primary purpose of its corporate charter.

    Soon, Alcantara and Anggala offered to buy out the public of their 1.636 million iRipple shares, equivalent to 10.51 percent of the outstanding shares at P21.93 per share, the same price that the two partners paid for their earlier acquisitions.

    The tender failed. The public stockholders of iRipple decided to stick to their minority holdings. They were proven right. The stock that had hit a 30-day low of P36.20 suddenly surged to a high of P82.60 on Sept. 23.

    Public’s gain
    Who would bite an offer of P21.93 per share, while iRipple’s share price has been surging? The public investors were right in rebuffing the tender.

    By selling their holdings to Alcantara and Anggala at such a low price, they would have lost P60.67 per share in paper value, while the buyers would be laughing all the way to the bank.

    Had the new majority stockholders succeeded in taking over 100-percent ownership of iRipple, they would still be required to sell 10 percent of outstanding shares to the public for the company to remain listed, if not necessarily public.

    The 10-percent minimum public ownership rule, though, is vague. It does not define who the public investors are. Does this cover even unnamed buyers whose holdings are lodged with PCD Nominee Corp.? How about the holdings of offshore companies whose stockholders are not disclosed? Do they qualify as public stockholders?

    What tender offer?
    Due Diligencer avoids the usual phrase “tender offer” in this piece for being redundant. “Tender” means offer and to use “tender offer” would be mimicking the use of “toll fee” by Philippine National Construction Corp. (PNCC).

    In reminding motorists that it would be more convenient for them to pay the exact change, PNCC, which the Malacanang chief occupant has placed under his jurisdiction, posted this sign along the South Luzon Expressway: “Pay exact toll fee…”

    Why would anyone “pay double”—that is for the toll and for the fee—for a “faster trip?”

    Going back to tender, in the event of a takeover of a listed company, the Securities and Exchange should require the new majority stockholders to spell out their plans for the company in their disclosures.

    For instance, by converting iRipple into a holding company, Alcantara and Anggala must have some ideas for Alterra. They should disclose in their regulatory filings whether they plan to swap Alterra shares with any of the companies that they presently own.

    In raising iRipple’s authorized capital stock to 40 billion shares, Alcantara and Anggala must have something undisclosed that the public has yet to know but should be told.

    esdperez@gmail.com.

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