PhilWeb's Ownership Restructured Following Key Stake Sale

Gregorio Ma. Araneta III has made a significant move in the gaming technology industry by selling his majority stake in PhilWeb Corp. His investment vehicle, Gregorio Araneta Inc., finalized the sale of a controlling 57% interest to two local entities, Nexora Holdings, Inc. and Velora Holdings, Inc., for a combined sum of PHP 1.8 billion, equivalent to approximately $30.9 million. This transaction marks Araneta's departure from the company he took control of nearly a decade ago, signaling a notable shift in the landscape of the Philippine gaming sector.

Market Reactions and Regulatory Implications

Following the announcement to the Philippine Stock Exchange (PSE), PhilWeb disclosed that the sale involved the transfer of 829.57 million common shares at a rate of PHP 2.17 each, equating to roughly $0.037 per share. Both Nexora and Velora are noted for their roles as local investment management companies specifically formed to handle securities and other asset investments. Importantly, PhilWeb clarified that these entities do not engage in soliciting investments or managing funds on behalf of third parties. The immediate aftermath of the deal saw the PSE temporarily suspending trading of PhilWeb shares. This one-hour suspension allowed investors to assess the impact of the sale. When trading resumed, PhilWeb's share price experienced a significant drop of over 20%, ending the day at PHP 4.06 per share, around $0.070. Moreover, as stated by the Securities Regulation Code, a mandatory tender offer will be required since the acquisition exceeds the threshold of 35% of the company’s voting shares. This offer allows other shareholders to sell their shares under the same terms, potentially altering the company's public ownership metrics, which includes raising the foreign ownership stake from a minimal 4.9% to a possible 40%. Despite these changes, PhilWeb maintains that its compliance with foreign ownership regulations remains unaffected, as the company does not possess land assets.

Leadership Changes and Future Prospects

This pivotal transaction also initiates a period of leadership transition at PhilWeb. Edgar Brian Ng, affiliated with Nexora and serving as PhilWeb's president and director, was identified as a prominent figure in the acquisition process. Additionally, Crisanto Roy Alcid, who serves as PhilWeb's vice chairman and treasurer, also holds a significant position within Nexora. These appointments suggest a degree of continuity despite the overarching ownership change. Araneta's decision to divest his stake draws a close to his tenure at the firm, a journey that began when he acquired PhilWeb from the estate of the late business magnate Roberto Ongpin in 2016 for approximately PHP 2 billion, equating to $34 million. This exchange occurred under a cloud of regulatory pressure, as the Duterte administration revoked PhilWeb's gaming license amidst efforts to diminish what they perceived as oligarchic influence in the industry. Araneta's entry was considered a stabilizing force for PhilWeb, which helped restore its operations after this regulatory intervention. Experts in the market now speculate on the transformative potential of this sale, hinting at possible strategic restructuring or even a backdoor listing by Nexora or Velora. Nonetheless, no definitive plans have been announced by the new owners. The transaction ultimately transitions PhilWeb’s stewardship from connections to governmental influence to a fresh set of owners poised to steer the company's next phase of development.

Source: Source: "Gregorio Araneta Sells Majority Stake in PhilWeb," GamblingNews.