The Securities and Exchange Commission (SEC) is investigating whether Suntrust Home Developers, co-developer of Westside City Resorts World, should have made a tender offer to public investors, during its acquisition by Suncity Group, The Inquirer reports.
The company was recently acquired by Suncity Group Holdings, as a way for the junket operator to make its foray into the Philippines’ gaming market – with a 51 percent share in the company.
According to SEC Commission Secretary Arman Pan, the commission is looking into whether Suncity needed to conduct a tender offer for the minority shareholders at the time of acquisition, or whether “there was no need for a tender offer because Suncity Group, through its wholly-owned subsidiary Fortune Noble Ltd., supposedly acquired control of Suntrust in the open market.”
Under the tender offer rules, any person or group intending to acquire 35 percent of outstanding vote shares to gain control of the board in a public company must disclose such intention and contemporaneously make a tender offer for the percentage sought to all holders of such securities within such period.
For any acquisition that will result in ownership of over 50 percent of the total outstanding equity shares of a company, the acquirer is required to make a tender offer for all the outstanding equity securities to all remaining stockholders.
However, Pan said the contention is that while the acquisition was done through an agreement to cross shares in the open market, meaning a tender offer was not required, there remains a question whether this method was indeed “open”.