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Retail, domestic funds, and foreign investors grab Metro Pacific Investment (MPI) shares after 5 Billion-Peso share buy-back announcement

Fresh with cash from its shareholdings sell-down in Metro Pacific Hospital Holdings, Inc. to KKR and GIC, Metro Pacific Investments Corporation (MPI) announced on October 1, 2020 a 5 Billion-Peso share buyback program.  It seems that for now MPI can’t find an attractive target other than its own shares.

Just last December 2019, MPI completed the deal with KKR and GIC (one of the sovereign wealth funds of the Republic of Singapore) to whittle down MPI’s holdings (economic interest)  in Metro Pacific Hospital Holdings to just 20% from 85.6%.  The sell-down of its interest in Metro Pacific Hospital Holdings grossed MPI around 23.5 Billion Pesos in cash.

The proceeds of the divestment of its interest in Metro Pacific Hospital Holdings boosted the cash balance of MPI to 64.1 Billion Pesos as of June 30, 2020 fortifying its balance sheet.  Its cash balance is more than double its current and short-term debt of 30.3 Billion Pesos as of June 30, 2020.

MPI operates and invests in critical infrastructure – power generation, toll, water, electric distribution, and hospitals- which are cash flow rich enterprises.  This enabled MPI to generate 9.6 Billion Pesos from operations not counting the cash dividends from electric distribution and others of 5.3 Billion Pesos.

Surely, MPI can well afford to invest 5 Billion Pesos on its own shares.  The share buyback announcement triggered a mad dash from different sorts – retail investors, domestic funds, and foreign investors- for MPI shares.  A day after the announcement, MPI jumped 4.23% with a volume of more than 4x its 65 day average.

MPI is an affiliate of PLDT (TEL). TEL and MPI are both controlled by the Hong Kong based First Pacific Company Limited. According to First Pacific, it owns 42.2% of MPI. GT Capital Holdings (GTCAP) also owns 15.55% of MPI.

Disclaimer and Disclosure: This is an independent analysis for discussion purposes with the aim of giving stock traders and investors an independent view point. Accuretti Systems Inc. in the course of day to day trading may have own, or is considering buying or disposing, the shares of the companies mentioned in this commentary.

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