Ayala buying 100% interest on ETELECARE

[businessempire]

Minority investor is buying 100% stake on ETELECARE.

So magiging locally-owned company na ang ETELECARE.



Inquirer Money / Top Stories
http://business.inquirer.net/money/topstories/view/20080922-162158/UPDATE-Ayala-Corp-in-290-M-eTelecare-tender-offer
(UPDATE) Ayala Corp in $290-M eTelecare tender offer


By Elizabeth Sanchez-Lacson
Philippine Daily Inquirer Reuters

Posted date: September 22, 2008


MANILA, Philippines -- Ayala Corporation said Monday it launched a $290-million tender offer locally and in the United States to raise its stake in Nasdaq-listed outsourcing firm eTelecare Global Solutions Inc.
Ayala, through its affiliate LiveIt, and its partner Providence Equity Partners plan to acquire up to 100 percent of eTelecare's outstanding common shares and American Depositary (ADS) shares for $9.00 per share, a 76-percent premium over its closing price on Nasdaq on Sept. 18.

ETelecare announced the buyout on Friday. The firm's ADS jumped 66 percent to end at $8.45.

ETelecare, in which LiveIt currently has a 22-percent stake, provides voice and non-voice customer-care services to Fortune 100 companies. Its clients include Time Warner's AOL.

Philippine holding firm A. Soriano Corp. said in a separate statement to the stock exchange it agreed to sell its 1.88 million shares, or 6.0-percent stake, in eTelecare to Ayala and Providence Equity.

A Soriano will receive about $17 million from the transaction.

Philippine shares of eTelecare jumped 25 percent on Monday to close at P375 ($8.08) following the disclosure, outpacing the 2.3 percent rise in the main stock index.

Morgan Stanley is advising eTelecare on the deal, while NM Rothschild & Sons is advising Ayala and Providence Equity.


©Copyright 2001-2008 INQUIRER.net, An Inquirer Company

[Verbl Kint]

100% of the outstanding common shares is not a 100% stake in the company. In fact, since eTel is on Nasdaq, it would have to be delisted first to be 100% owned by a holding company.

[archer_dude]

Locally owned naman **** dati pa ang Etel diba? and dati pa, stockholder na ng eTelecare ang Ayala. Correct me if im wrong though.

[auxes]

Minority investor is buying 100% stake on ETELECARE.

So magiging locally-owned company na ang ETELECARE.



Inquirer Money / Top Stories
http://business.inquirer.net/money/topstories/view/20080922-162158/UPDATE-Ayala-Corp-in-290-M-eTelecare-tender-offer
(UPDATE) Ayala Corp in $290-M eTelecare tender offer


By Elizabeth Sanchez-Lacson
Philippine Daily Inquirer Reuters

Posted date: September 22, 2008


MANILA, Philippines -- Ayala Corporation said Monday it launched a $290-million tender offer locally and in the United States to raise its stake in Nasdaq-listed outsourcing firm eTelecare Global Solutions Inc.
Ayala, through its affiliate LiveIt, and its partner Providence Equity Partners plan to acquire up to 100 percent of eTelecare's outstanding common shares and American Depositary (ADS) shares for $9.00 per share, a 76-percent premium over its closing price on Nasdaq on Sept. 18.

ETelecare announced the buyout on Friday. The firm's ADS jumped 66 percent to end at $8.45.

ETelecare, in which LiveIt currently has a 22-percent stake, provides voice and non-voice customer-care services to Fortune 100 companies. Its clients include Time Warner's AOL.

Philippine holding firm A. Soriano Corp. said in a separate statement to the stock exchange it agreed to sell its 1.88 million shares, or 6.0-percent stake, in eTelecare to Ayala and Providence Equity.

A Soriano will receive about $17 million from the transaction.

Philippine shares of eTelecare jumped 25 percent on Monday to close at P375 ($8.08) following the disclosure, outpacing the 2.3 percent rise in the main stock index.

Morgan Stanley is advising eTelecare on the deal, while NM Rothschild & Sons is advising Ayala and Providence Equity.


©Copyright 2001-2008 INQUIRER.net, An Inquirer Company

:hmm:
*okay*

[MarciCinnamon]

This looks to be a consolidation exercise. The Ayalas have had a major interest in eTelecare since the beginnning. LiveIt is under Fred Ayala, so this looks to be leveraging.

[businessempire]

Locally owned naman **** dati pa ang Etel diba? and dati pa, stockholder na ng eTelecare ang Ayala. Correct me if im wrong though.

Etelecare is locally listed in the Philippine Stock Exchange to make it easier for Filipino residents to become shareholders of this company.

In the same manner that our PLDT is listed at the NYSE to make it easier for Americans to become owners of the company, thus PLDT is considered as American Depository Receipts or ADR at the New York Stock Exchange.

Many of us who have bought ETEL locally or at the NYSE are already shareholders of this company including the Ayalas. The only difference is that the Ayalas have significant interest in the company and based on the news report posted hereof, the Ayalas are in the process of acquiring UP TO 100% of ETELECARE or at the very least increasing its current stake with the other shareholder maintaining their current holdings.

100% here does not literally mean 100% ownership by the Ayalas because ETEL is a public corporation where some (but not all) of its shares are listed in a stock exchange (or stock exchanges). 100% refers to the issued and outstanding shares that are not offered in public (stock exchange) and these are exclusively controlled by major shareholders of the corporation while maintianing their desired controlling interest and voting rights in the company.

I hope this clarifies the matter at the very least on its surface or better yet please refer to the Corporation Code in both countries in the Philippines and United States to fully understand the report and the remarks I made.

The bottomline, ETELECARE is for sale. And the Ayalas may take over the management in FULL CONTROL.

Thank you.

[pinoynetwit]

Shares that are not outstanding but issued refer to:

-employee stock options[free or otherwise]
-convertible debt or debt that is convertible into common shares
-treasury shares

This can be gleaned through the notes on financial statements about the capital structure of the listed company.

Buying 100 percent of outstanding shares includes shares of the controlling shareholders and also shares of minority shareholders. Share of the majority shareholders are included in the "outstanding shares"...but selling them has disclosure and holding period rules. An offer to buy 100 percent is part of any decent "tender offer rule" in stock exchanges to give each shareholder an equal footing...controlling and minority shareholders.

Useful resource:

http://content.lawyerlinks.com/default.htm#http://content.lawyerlinks.com/sec/tender_offers/mechanics.html

Shares of Etelecare are listed locally in the PSE via "Introduction" instead of an "Initial Public Offering" or "Backdoor listing".

Listing by introduction does not raise capital but allows shareholders to trade the stock. It also enhances a company’s reputation since listed firms are supposed to follow good corporate governance rules. Listing by introduction makes it subsequently easier for the company to raise funds later via an initial public offering [IPO].

I did years of work in the research departments stock brokerages both local and foreign and enjoy speculating in shares as a hobby and source of big income.

[businessempire]

For example:

ABC Corporation.

Majority Sharesholders:

xyz 40%
John 20%
R 25%

Other shareholders:

Public 15%

In this example, xyz can buy all the shares of John and R and may also offer to buy shares from the stock exchange (Public) some of the 15% to increase its holdings or interest in the company.

Normally, those shares currently owned by John, R and xyz are transacted through block sales (special agreements - .ie. takeover, etc....). Agreed price may be higher from the existing market price.

Suppose xyz had successfully bought all shares of John and R, then xyz has now 85% controlling interest in the company and has significant control of management (voting rights) although it still need the nod of the other shareholders (remaining 15% in public)to ensure 100% the composition of their desired board of directors to represent the management thereof, in which case xyz has now ABSOLUTE CONTROL management.


SPECULATION has no place in the real world of investing. Speculation are soley for gamblers.

[pinoynetwit]

The shares of minority shareholders tendered with the stock transfer agents - as part of a "tender offer" - are also eventually transacted through a "block sale" that can have a price that is different from the current exchange traded price.

Under corporate law, a person/legal entity detains majority control if he controls (directly or indirectly) more than 2/3 of the voting shares. Offering to buy 100% of the outstanding shares of promoting is part of any "tender offer rule" so as not to disadvantage the minority shareholders.

Speculation in the jargon of us who worked in the stock brokerage industry, does not cover only gamblers but also covers short term investing by astute investors who have skill in using information gleaned from balance sheet analysis, fundamental analysis, economic/industry trends, corporate management, chart analysis. Any seasoned fund manager, dealer is familiar with this definition of a speculator.

The social function of a speculator:

http://mises.org/story/2381

[Verbl Kint]

Given etelecare's current difficulties in keeping their clients, I wonder if the 76% premium paid by the Ayala group is wise. This offer must have been a godsend for the Soriano group.

[businessempire]

Given etelecare's current difficulties in keeping their clients, I wonder if the 76% premium paid by the Ayala group is wise. This offer must have been a godsend for the Soriano group.


haha! Yes sir. If your statement holds true, fundamentally, the offer price may have put the Ayalas at a disadvantage. In business kasi, utakan lang iyan. :D If the sale pushes through under similar agreements, baka maisahan lang ang mga Ayala. :lol:

In the first place, bakit kaya binebenta by the current majority shareholders ang Etel ? Or is this a win-win situation ? or a win-lose situation ? :lol: Who's the winner ? Who's the loser ? :rotflmao:

You made a good analysis. *okay*

[businessempire]

Contrary to popular belief, from time immemorial ....

Speculators never last in Wall Street. :lol: So the notion that there are successful speculators is nothing but pure hype.

There is no such thing as successful speculators in Wall Street. :D They come and go . . . :bop: