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Specom 8

The document discusses three cases related to the tender offer rule under the Securities Regulation Code: 1) The first case discusses whether a tender offer is required when an indirect acquisition of shares in a publicly listed company results in ownership of over 50%. 2) The second case examines whether a tender offer is required when a company acquires over 50% of another company that owns 60% of a publicly listed firm. 3) The third case asks whether a tender offer is needed when a company seeks to increase its ownership from 25% to over 35% by purchasing additional shares three years after its initial acquisition.

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92 views2 pages

Specom 8

The document discusses three cases related to the tender offer rule under the Securities Regulation Code: 1) The first case discusses whether a tender offer is required when an indirect acquisition of shares in a publicly listed company results in ownership of over 50%. 2) The second case examines whether a tender offer is required when a company acquires over 50% of another company that owns 60% of a publicly listed firm. 3) The third case asks whether a tender offer is needed when a company seeks to increase its ownership from 25% to over 35% by purchasing additional shares three years after its initial acquisition.

Uploaded by

jon jon
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SECURITIES REGULATION CODE: JURISDICTION (2015)

Mr. and Mrs. Reyes invested their hard-earned savings in securities issued by LEAD Bank.
After discovering that the securities sold to them were not registered with the SEC in
violation of the Securities Regulation Code, the spouses Reyes filed a complaint for nullity of
contract and for recovery of a sum of money with the RTC. LEAD Bank moved to dismiss the
case on the ground that it is the SEC that has primary jurisdiction over actions involving
violations of the Securities Regulation Code.

If you were the judge, how would you rule on the motion to dismiss? (3%)

SECURITIES REGULATION CODE: TENDER OFFER RULE (2016)


C Corp. is the direct holder of 10% of the shareholdings in U Corp., a nonlisted (not public)
firm, which in turn owns 62% of the shareholdings in H Corp., a publicly listed company. The
other principal stockholder in H Corp. is C Corp. which owns 18% of its shares. Meanwhile, the
majority stocks in U Corp. are owned by B Corp. and V Corp. at 22% and 30%, respectively. B
Corp. and V Corp. later sold their respective shares in U Corp. to C Corp., thereby resulting in
the increase of C Corp.'s interest in U Corp., whether direct or indirect, to more than 50%.

a. Explain the Tender Off er Rule under the Securities Regulation Code. (2.5%)
b. Does the Tender Off er Rule apply in this case where there has been an
indirect acquisition of the shareholdings in H Corp. by C Corp.? Discuss.
(2.5%)

SECURITIES REGULATION CODE: TENDER OFFER RULE (2018)


Yenkell Cement Corporation (YCC) is a public corporation whose shares are listed at the PSE.
It is 60% owned by Yenkell Holdings Corporation (YHC) and 20% by Yengco Exploration Inc.
(YEI). The remaining 20% is held by the public.

YHC is a private non-listed corporation which, in turn, is 60% owned by Yatlas Mines Inc.
(YMI), and 40% by Yacnotan Consolidated Inc. (YCI). On August 8, 2008, the Board of
Directors of YEI passed a resolution approving the acquisition of 50% and 25% of the shares
held by YMI and YCI, respectively, in the authorized capital stock of YHC.

Yolly, one of the staff members in the office of the Corporate Secretary of YEI, was
immediately asked to type the resolution and file the disclosure with the PSE and the
Securities and Exchange Commission (SEC). Before doing that, she secretly called her
brother who works with a stock brokerage company, to purchase, in the name of Yolly's
husband, 5,000 shares in YCC. After the acquisition was disclosed to the SEC and the PSE,
the market price of YCC increased by 50%.

In acquiring 75% of the total capital stock of YHC, should YEI be required to do a
mandatory tender off er? (2.5%)
SECURITIES REGULATION CODE: TENDER OFFER (2019)
ABC Corp. is a company which shares are listed in the Philippine Stock Exchange. In 2015, 25%
of ABC Corp.'s shareholdings were acquired by XYZ, Inc., while 40% of the same were
acquired by RST, Inc., both of which are non-listed private corporations. Meanwhile, the
remaining 35% of ABC Corp.'s shareholdings are held by the public.

In 2018, or three years (3) after it acquired its 25% stake in ABC Corp., XYZ, Inc. sought to
obtain an additional 12% shareholding in ABC Corp. by purchasing some of the shares owned
by RST, Inc. therein

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