The Philippine Securities and Exchange Commission has ordered Cemco Holdings Inc to make a tender offer to other shareholders of Holcim Philippines Inc, formerly known as Union Cement Corp (UCC). Cemco, 40 per cent-owned by Holcim Ltd, last year bought a 51 per cent stake in UCC major shareholder Union Cement Holdings Corp from Bacnotan Consolidated Industries. Bacnotan and unit Atlas Cement sold their respective 21.3 per cent and 29.7 per cent interests in Union Cement Holdings for a total of US$214m. The SEC made its ruling on a complaint filed by National Life Insurance Co of the Philippines Inc, a minority shareholder of UCC with about a 0.25 per cent stake, which had asked Cemco to buy its UCC shares at 6.00 pesos each. UCC had earlier argued the acquisition by Cemco of majority shares of UCC was not covered by the mandatory tender offer requirement under the Securities Regulation Code (SRC).
"The SRC provision on the mandatory tender offer rule was adopted for the purpose of protecting the minority stockholders of a listed or public corporation," the SEC said in its February 14 decision. The SEC reversed and set aside its previous decision on the complaint of National Life. In order to give all concerned parties sufficient time to evaluate the SEC decision, the stock exchange suspended trading in shares of Holcim Philippines today, to be lifted one hour after the dissemination of its decision. It closed at 4.05 pesos yesterday.