THE PRINCIPAL shareholders of LMG Corp. have agreed to sell their combined 67% stake in the listed holding firm to Maxwealth Infinity Holdings Corp. in a deal valued at P402 million.
In a regulatory filing on Wednesday, the company said the shareholders had entered into a share purchase agreement with Maxwealth, which will buy about 129.67 million common shares at around P3.1 each.
LMG identified Ann Marrieta L. Sytin, with 98.58 million shares, Robinson W. Siao, with 29 million shares, and Value Quest Securities Corp., with 2.09 million common shares, as the selling shareholders.
“The sellers decided to sell their shares in the corporation to pursue different business goals, which are not aligned with the objectives of a publicly listed company,” it said.
The company said Maxwealth would maintain the current business profile of LMG as a holding and investment company, It said the buyer has no immediate plans to change LMG’s business purpose.
According to the company, Maxwealth, headed by Alfonso Huang, is a holding firm with investments in various financial and information technology companies.
“Moving forward, the buyer intends to invest in the hospitality industry and the construction industry, consistent with its plan of diversifying its portfolio across various industries,” it said.
LMG said the buyer intends to expand the portfolio of the company to include Maxwealth’s operating subsidiaries. The move would provide LMG with the option to raise capital and investments.
Maxwealth will likewise conduct a tender offer to acquire minority shares in accordance with the Securities and Regulation Code, and its implementing rules and regulations.
Both parties intend to complete the tender offer and transaction within the next 60 days, while payment of the tender offer price will be done simultaneously with the payment of shares held by the principal stockholders.
“Should there be changes in the targeted timeline, the parties endeavor to revise this report and make the necessary disclosures,” LMG said.
LMG described Maxwealth’s primary purpose to include the following: “acquire, hold, sell, exchange, deal and invest in the stocks, bonds, or securities of any government, and in real or property of all kinds.”
Separately, the Philippine Stock Exchange (PSE) said that after an evaluation, it had deemed the transaction as covered by its Revised Rules on Backdoor Listing.
“Said determination is anchored on the transaction resulting in or will result in a change of control of LMG and/or a substantial change in LMG’s business,” the exchange said.
According to the PSE, a transaction is deemed a backdoor listing when a listed company is acquired by, merged, or combined with an unlisted company, and which acquisition, merger, or combination results in a substantial change in the business, membership of the board of directors, or voting structure of the listed company.
Also on Wednesday, the PSE said that it had implemented a trading halt on LMG shares due to its disclosure and pending regulatory evaluation of the transaction.
“The exchange will inform the trading participants and the investing public of further developments on the matter,” it added.
In the first quarter, LMG reported a net income of about P7.2 million attributable to the parent equity holder, or more than double the P2.95 million recorded in the same period last year. — Adrian H. Halili