MANILA, Philippines – EEI Corporation’s president and chief executive officer Henry Antonio led a management buyout by acquiring a 20% stake from RYM Business Management, the holding firm of House Speaker Martin Romualdez’s family.
In a disclosure to the Philippine Stock Exchange on Wednesday, March 19, the Yuchengco-owned construction firm said a management firm controlled and led by Antonio bought RYM’s shares.
“The deal underscores Antonio’s deep understanding of EEI’s operations and long-term confidence in its mission, values and potential for growth,” EEI wrote.
A management buyout is when a company’s leadership acquires shares or assets of the company that they manage. They often do this to grow the business and increase autonomy.
EEI has not disclosed the price of the deal, but its shares closed at P3.96 apiece on Tuesday, March 18. Based on this valuation, the stake is worth around P820 million.
According to Antonio, the management buyout also underscores the management’s belief in EEI’s overall growth potential as it seeks to expand its business to real estate and power.
He added that EEI is exploring opportunities to allow its employees to acquire more shares of the company.
“We will be looking for further opportunities for our own employees to acquire more shares in the company so that they too can also have a significant stake in its future,” EEI’s chief executive said in a statement.
A reversal of 2023 deal?
For Unicapital’s equity research analyst Jeri Alfonso, the motivations behind the buyout leaves some questions unanswered, especially since Antonio took the route of a management buyout instead of purchasing shares through the board.
EEI’s free float remains at 44.64%, well above regulators’ requirement of having 20% of shares made available for public trading.
However, Alfonso believes the transaction may simply be a reversal of RYM’s acquisition of its stake in EEI.
“On the surface, [it] seems like RYM Business Management and the Yuchengco Group had some sort of understanding to reverse the transaction from two years ago when RYM acquired House of Investments’ 20% stake in EEI at P6.0312 per share,” she told Rappler.
“Given that HI and EEI are both under the Yuchengcos, this could simply be a reversal of the previous deal—nothing more, nothing less.”
RYM Management first acquired its 20% slice of EEI from P1.25 billion, reducing the stake of Yuchengcos’ holding firm House of Investments (HI) in EEI from 55.3% to 35.5%.
EEI’s shares closed 6.06% higher at P4.20 apiece on Wednesday trade. HI’s share price also jumped 3.12% to P3.42 per piece. – Rappler.com