Most investors could not care less when a public company decides to delist its listed shares from the secondary market but there are some minority shareholders who felt shortchanged by the majority shareholders. Some argued that the tender offer price should be the same as the initial public offer price while some accepted the tender offer price rather than hold the untradeable listed shares. Historical cost method used in accounting where the price of an asset is based on its original cost when acquired cannot be used for the tender offer price because value changes over time. Although the voluntary delisting rules should not be blamed for the tender offer price, the Securities and Exchange Commission and the Philippine Stock Exchange should be commended for tightening the requirements for a public company to delist its listed shares from the secondary market. While the old voluntary delisting rules could be approved by the Board of Directors, the new voluntary delisting rules should be approved by shareholders who own at least 2/3 of the total outstanding and listed shares, at least 2/3 of the Board of Directors, and at least 2 of the independent directors. To further tighten the requirements for a public company to delist its listed shares from the secondary market, the new voluntary delisting rules require that the number of votes cast against the voluntary delisting should not be more than 10% of the total outstanding and listed shares, the minimum tender offer price should be higher than the highest valuation based on the fairness opinion and valuation report prepared by an independent valuation provider, and higher than the volume weighted average price of the listed shares for a year preceding the date of posting of the voluntary delisting disclosure. The new voluntary delisting rules expanded the supervisory capacity of the concerned government regulatory agencies on public companies that could be planning to support the short-term interests of the majority shareholders and elude the long-term interests of the minority shareholders. Those who have less in life should have more in laws and the new voluntary delisting rules are what we need to discourage public companies from delisting its listed shares from the secondary market at the expense of the public. We do know that the new voluntary delisting rules are not perfect but at least they serve the purpose of making it cumbersome for public companies to bend the rules without breaking it.
