Public own only 1.658% of ABS-CBN, not 43.18%



IF you believe ABS-CBN Corp., you may be one investor who is in for a big surprise. Its public ownership report (POR), posted on the website of the Philippine Stock Exchange, not only presents you the wrong numbers; its computations are even misleading.

A brief description is needed for each of the entries under ownership. Name refers to the identity of stockholders; direct and indirect to the kind of holdings, whether personally owned or held by a corporate stockholder for beneficial owner; total direct and indirect shares are the sum of all holdings.

The percentage against total outstanding shares obviously requires dividing the number of shares owned by a stockholder by the total number of outstanding shares to get the percentage equivalent.

ABS-CBN has 850.801 million outstanding common shares and 21.323 million treasury shares, for a total of 872.124 million issued shares. As far as these entries are concerned, they are correct.

As an ownership filing, the POR posted by listed companies does not include preferred shares. The omission should justify the belief of neutral market observers, including Due Diligencer, that this class of shares, whether voting or non-voting, are better recorded under liabilities.

Ownership profile
The same POR listed 11members of the board as holders of 1.254 million shares, or 0.15 percent, according to the ownership filing posted by Ricardo Tan Jr., corporate treasurer, corporate information officer and compliance head. When recomputed, the result was 0.147 percent, which Tan rounded off to the higher percentage equivalent.

Nothing is wrong with Tan’s presentation. When digesting the numbers, the public investors should consider recomputations to arrive at the correct percentage of public ownership.

The filing showed the 10 officers own 234,773 shares, or 0.1 percent. Their holdings, plus the ABS-CBN shares owned by 11 directors, would be equal to 1.489 million shares, or 0.175 percent.

How about ABS-CBN’s three corporate stockholders? The TV group listed ABS-CBN Holdings Corp twice – once as a principal or substantial stockholder, together with Lopez Inc., which holds 480.934 million shares, listed by ABS-CBN only in decimals such as 0.57 percent. The company should have translated that to either 57 percent, or simply as 56.527 percent if not rounded off to 57 percent.

ABS-CBN credited ABS-CBN Holdings Corp. with 329.001 million shares, or 3.867 percent, as a principal stockholder. At the same time, it listed it as an affiliate with 780,995 shares. A previous POR identified the true owner as ABS-CBN Foundation Inc., holding the same number of ABS-CBN shares.

Public stockholders
Like other listed companies, ABS-CBN wrongly credited the public as owner of 367.343 million shares, or 43.18 percent. The public held only 31 million shares equivalent to 1.658 percent.

Does the public ownership of 43.18 percent that ABS-CBN listed in its POR portray its true ownership profile?

To get the answer, the public investors may want to read the preliminary information statement (PIS) filed by ABS-CBN in connection with its annual stockholders’ meeting on May 5, 2016. The computations were based on 872.124 million outstanding common shares and 1 billion outstanding preferred shares. When added, these two classes of shares totaled 1.872 billion shares.

In the PIS referred to above, it listed Lopez Inc. as owner of 480.934 million common shares, or 55.15 percent of outstanding common shares and 25.69 percent of total outstanding capital stock of 1.872 billion shares. It also owns 987.13 million preferred shares, or 98.71 percent of 1 billion outstanding preferred shares and 52.73 percent of 1.872 billion outstanding capital stock. PCD Nominee Corp. holds 373.017 million common shares, or 42.77 percent of 872.124 million outstanding common shares, or 19.92 percent of 1.872 billion outstanding capital stock for ABS-CBN Foundation Inc.

All in all, the three Lopez-owned corporate stockholders hold a total of 1.841 billion shares, or 98.342 percent. Lopez Inc. and ABS-CBN Foundation combined have total holdings of 853.951 million common shares, or 97.916 percent. If the Lopezes own 98.342 percent of ABS-CBN’s 1.841 billion outstanding capital stock, who then among the public hold 31 million shares, or 1.658 percent? Just asking.


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