Property woes prompt 8990 delisting
The challenging residential property market in the Philippines may have driven mass housing developer 8990 Holdings Inc.’s P6.1-billion exit from the local bourse.
Ron Acoba, chief investment strategist at Trading Edge Consultancy, said this could be a “strategic move” on the part of 8990.
“It would free the management from the ongoing obligation to update public shareholders about their plans amid this difficult environment,” Acoba told the Inquirer on Thursday.
8990 currently focuses on the affordable and mid-market residential segments. The latter has particularly been dealing with slow demand due to high mortgage rates, resulting in rising unsold inventory in Metro Manila.
The company’s projects include medium-rise condominiums under the Urban Deca Homes brand and high-rise projects under Urban Deca Towers.
The developer on Thursday disclosed that its board of directors had approved its voluntary delisting to “unlock the intrinsic value of the company’s business and assets, which does not seem to be fully appreciated by the market.”
8990 Housing Development Corp. will conduct a tender offer to buy out the minority shareholders of the company.
The tender offer price is set at P10.42 per share, or a 13.3-percent premium over its closing price of P9.20 on Wednesday.
However, the delisting is still subject to the approval of its shareholders during a special meeting on Aug. 26.
It would be the third company to go private this year after Keppel Philippines Holdings Inc. (voluntary) on July 8 and Philab Holdings Corp. (involuntary) on July 11.
Wendy Estacio-Cruz, research at Unicapital Securities Inc., also noted that delisting would allow 8990 to “operate with more flexibility, avoid the regulatory burdens of being publicly listed and possibly pursue long-term plans that are easier to execute privately.”
“More companies are choosing to exit rather than remain listed, signaling that the perceived benefits of being on the PSE may no longer outweigh the costs,” Cruz added.
