ROBINSONS Land Corp. (RLC) is the property subsidiary of the group of companies owned by businessman John Gokongwei Jr. and his family. A public ownership report (POR) as of Sept. 30, 2017 listed JG Summit Holdings Inc. (JGS) as owner of 2,496,114,787 (2.496 billion) RLC common shares, equivalent to 60.973 percent of 4,093,830,685 (4.094 billion) outstanding RLC common shares.
The same POR and the list of top 100 stockholders of Robinsons Land bear the same cut-off date – Sept. 30, 2017 – and were posted on Oct. 12, 2017 on the website of the Philippine Stock Exchange (PSE). Both ownership filings attributed to JG Summit the ownership of the same number of RLC common shares.
Aside from outstanding common shares, the PSE website also showed Robinsons Land to have issued 4.112 billion common shares, which are all listed. By subtracting RLC’s outstanding common shares from 4.112 billion issued RLC common shares, this would result in 17.698 million common shares, which are held in treasury.
In its 2017 third quarter report, Robinsons Land placed the acquisition cost of 17.698 million RLC common shares at P221,834,657, or P12.534 per share.
At RLC common shares’ closing price of P21.95 per share on Friday last week, the company scored a paper gain of P9.416 per common treasury share. Does this give the public stockholders an idea when to accumulate RLC common shares and when to sell them? Should they go along with a listed company’s buyback of its own listed common shares?
Robinsons Land is selling additional common shares that would come from unissued shares to meet the requirement of a stock rights offering. As disclosed, it would issue one rights share for “approximately” every 3.6 to 4.3 common shares held by its stockholders.
Anyway, whether or not Robinsons Land changes its mind about the stock offering, Due Diligencer is doing a computation based on the numbers already disclosed.
At “approximately” 3.6 RLC common shares held, a stockholder would be entitled to buy one share. The computation resulted in “approximately” 1.137 billion RLC common shares for all stockholders.
Again, at “approximately” one rights share for every 4.3 RLC common shares held, the company’s stockholders would get 952.054 million RLC common shares.
Due Diligencer arrived at the two results through the process of division: 4,093,830,685 RLC common shares divided by 3.6 common shares equals 1,137,175,190 common shares; and 4,093,830,685 common shares divided by 4.3 common shares equals 952,053,647.
(Note. To avoid confusion, the fractions were omitted from the quotients, which represent the results of the computation.)
Being the majority stockholder, JG Summit would be the biggest beneficiary of Robinsons Land’s stock rights offer. At one rights share for every 3.6 common shares it holds, it would be entitled to buy 693,365,218 common shares. At one rights share for every 4.3 common shares it owns, it would get 580,491,811 common shares.
After the offering, JG Summit would end up with 3,189,480,005 RLC common shares at one rights share for every 3.6 common shares it holds, and 3,076,606,598 RLC common shares at one rights share for every 4.3 common shares it owns.
So would the individual stockholders of Robinsons Land. If all of them would avail themselves of the stock rights offer, the percentages would not change. However, their decision to participate in the sale of new shares would depend on the price per share. The company has yet to announce how much JG Summit and the public would pay per RLC common share under the rights offer.
By the way, Robinsons Land still has 4,106,169,315 unissued common shares in its authorized capital stock of 8.2 billion common shares. With these remaining RLC common shares, it could easily accommodate the stock rights offer even at one rights share for every 3.6 RLC common shares, or one rights share for every 4.3 RLC common shares held.
Due Diligencer’s take
Robinsons Land is targeting to gross “up to P20 billion” from a stock rights offer of “approximately” 950 million and 1.1 billion RLC common shares.
If that’s what the company is aiming at, then it could price its stock rights offer of 950 million RLC common shares at “approximately” P21.053 per share. If Robinsons Land decides to sell 1.1 billion RLC common shares, to raise “up to P20 billion,” it has to set the price per stock rights share at P18.182.
A difference of P2.871 between the two per-common-share prices would favor a bigger offering of 1.1 billion RLC common shares. The reason for this suggestion is obvious: a stock rights offer of P21.053 per share would not be justifiable given RLC common shares’ closing price of P21.95 on Friday last week.
These computations, though, could lead to a guessing game among the public investors. Should they sell or buy more RLC common shares in the open market? The answer would depend on the yet “to-be-announced,” or TBA, as abbreviated, price per RLC common share.
By the way, At RLC common shares’ last traded price of P21.95 last Friday, JG Summit’s holdings would have market value of P70.009 billion, computed at one rights share for every 3.6 RLC common shares, and P67.532 billion at one rights share for every 4.3 RLC common shares.
In past stock issuances, didn’t Robinsons Land sell 4,111,528,685 common shares, which carried a par value of P1 per common share at an average premium of P4.96 per share? Just asking.