Federal Resources Investment Group Inc (FED) has entered into talks with LBC Express Inc, which offered to acquire FED as a means to enter the stock market through backdoor listing.
FED said in a disclosure to the stock exchange it has acceded to a request from one of its substantial shareholders “to allow LBC Express to conduct due diligence review of the company for the purpose of potential acquisition, buy-in or investment.”
“The said substantial shareholder and LBC continue to engage in earnest discussions on the terms of such potential transaction. However, no definitive agreement has been entered into in respect to such transaction at this time,” the company said.
According to its 2015 annual report, Federal Resources has gone through several corporate changes before settling in PVC resins, sealants, coatings and adhesives. It stopped its PVC operations in 2009, resulting in its worse net losses of P15.53 million.
The company has filed for a three-day voluntary suspension of its shares trading starting Friday, April 10, ahead of the announcement of the acquisition talks. Trading of its shares is expected to resume today, April 15.
LBC has been planning to debut in the stock market since last year through an initial public offering (IPO) but it abandoned the idea, and instead started to scout for a company to be used for backdoor listing.
LBC has said it prefers to raise funds in the equities market for its expansion plans in the next few years.
The PSE expects nine to 10 companies to apply for listing in the exchange this year.
Aside from the LBC backdoor, the anticipated listings for 2015 include: the IPOs of Company of Friends Inc. (P7.7 billion), Gweilo Corp. (P75 million) and Green Power Panay Philippines Inc. (P290 million); the follow on offering of Global Ferronickel (P32 billion); as well as the backdoor listing of National Book Store Inc. via Vulcan Industrial Mining Corp.