The Philippines’ Securities and Exchange Commission (SEC) is looking into whether or not Suntrust Home Developers Inc – the listed real estate company recently acquired by Suncity Holdings to develop a casino-hotel at Westside City Resorts World – must conduct a tender offer for the company’s minority shareholders.
According to the Inquirer, the SEC has issued subpoenas to the Philippine Stock Exchange for various records related to trades of Suntrust shares since Suncity announced in October the multi-layered agreement that would see it actively involved in the Westside City development.
As reported by IAG last week, Suncity Group subsidiary Fortune Noble Ltd completed the acquisition of 2.55 billion shares in Suntrust – equal to 51% of issued share capital – on 20 December 2019, with local real estate giant Megaworld Corporation acquiring another 43.5% and Aurora Securities Inc the remaining 5.5%.
However, SEC Commission Secretary Arman Pan says the SEC, through its markets and securities regulation department (MSRD), is “aware of questions raised over the non-conduct of a mandatory tender offer for the minority shareholders of Suntrust Home Developers Inc. following the acquisition by Suncity Group of control of the listed company.”
“Among others, MSRD is checking on claims that there was no need for a tender offer because Suncity Group, through its wholly owned subsidiary Fortune Noble Ltd., supposedly acquired control of Suntrust in the open market.”
Tender offer rules state that the acquisition of shares totaling more than 50% ownership in a listed company requires an offer be made to acquire all outstanding shares at a price deemed fair by an independent financial advisor or equivalent authority.
Westside City Resorts World is currently being developed on 31-hectares of land in Manila’s Entertainment City by Megaworld and Resorts World Manila operator Travellers International Hotel Group. A Co-Development Agreement entered into between Westside and Suntrust in October will see Westside and Travellers lease the project site for the main hotel and casino at Westside City Resorts World to Suntrust for development.
The Suntrust development is set to cost US$700 million and cover an area of around 44,000 square meters.
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