THE Securities and Exchange Commission (SEC) has approved the significant reduction of Max’s Group Inc.’s (MGI) share-sale offer as a result of the conditional approval by the Philippine Stock Exchange (PSE) on taxation concerns.
Max’s is only selling up to 197.18 million common shares at P17.75 per share offer for total proceeds of P3.5 billion. Originally, the company will sell 300.13 million shares, composed of 34.1 million new shares, 204.64 million group shares offered for sale of its wholly owned subsidiaries and 61.39 million shares secondary shares from the Max’s Group’s shareholders. The PSE, however, only approved the new and group shares but placed a conditional approval on the secondary shares as it needed the submission of the Bureau of Internal Revenue-issued certifications authorizing registration (CAR) as it pertains to the transfer of shares to Max’s entities from Max’s shareholders.
“The MSRD [the SEC’s Markets and Securities Department] believes that it is within the prerogative of the PSE’s board of directors to require the CARs for the transfer of MGOC [Max’s Group of Companies] shares to MGI,” the SEC said.
As a result, Max’s opted to carve out from their offer the secondary shares and will instead offer the new and group shares. It is now only selling 28.17 million new shares and 169.01 million group shares.
Its share sale is to begin on Monday, December 1, through Friday, December 5. Proceeds of the sale will be mostly used to pay for the acquisition of Pancake House Inc.
The remainder of the 300.13 million common shares that Max’s earlier already registered for its follow-on offering will be placed in the shelf.
Max’s said its market share of 28.3 percent of the country’s casual-dining restaurants is in terms of value sales for 2013.
The company reported a loss during the three quarters of the year with its flat revenues, as it said that a number of its stores are underperforming and may face closure.
Max’s said it incurred a net loss of P31.36 million for the period, from last year’s net income of P116.11 million. Total revenues, meanwhile, was flat at P2.7 billion as store sales of P2.2 billion remained the same from last year.