SHAREHOLDERS of San Miguel Pure Foods Co. Inc. on Thursday approved the consolidation of the beer and liquor businesses of the conglomerate into one big company, the shares of which will be listed at the Philippine Stock Exchange (PSE).
During the Pure Foods company’s special stockholders’ meeting, the company said it may do a follow-on offering in order to meet the minimum public float of the government at 15 percent.
According to the plan, Pure Foods will acquire Ginebra San Miguel Inc. (GSMI) and San Miguel Brewery Inc. (SMBI) and consolidate it into one big company. The shares, which is considered as a re-IPO (initial public offering), will be listed at the PSE, while the company will be renamed as San Miguel Food and Beverage Inc.
With the acquisition, Pure Foods’s public float will fall to about 4 percent, with San Miguel Corp. owning 95.87 percent of the company.
“There’s a big demand for a food and beverage [F&B] company in the Philippines, since it will become a proxy of the Philippine economy,” Ferdinand Constantino, San Miguel CFO and treasurer, said.
He did not state how much the company will raise from the follow-on offering.
Ramon S. Ang, San Miguel president and CEO, earlier said the company may sell another 30 percent of Pure Foods, once the consolidation is done, and is said to be worth $3 billion.
Ang said a number of foreign investors had already expressed intention to participate in the potential share sale that will be a combination of follow-on offering and private placement.
“So, we think we will sell consolidated company, will probably sell 30 percent of the company,” he earlier said.
San Miguel said the consolidation of the two units under Pure Foods will be done through a share swap where San Miguel will receive 4.24 billion newly created common shares of Pure Foods for the combined SMBI and GSMI shares worth P36.35 billion.
Pure Foods will be reducing its shares’ par value to P1, from the current P10 apiece, creating more shares of the company.
Pure Foods’s authorized capital stock will then be increased to P12 billion divided into 11.6 billion common shares with a par value of P1, and P40 million preferred shares with a par value of P10, from the current P2.46 billion divided into 2.06 billion common shares and P40 million preferred shares with a par value of P10.
San Miguel will then subscribe to 44 percent of the newly created shares as part of the share swap.
Existing Pure Foods shareholders will not be allowed to exercise their preemptive rights under the share swap using the newly created shares, at a price yet to be finalized.
The company will then have a tender offer for the remaining shares owned by the minority owners, but only when required by the regulators.
Pure Foods President Francisco S. Alejo III said the company prefers not to undergo into any tender offer procedure.
Standard Chartered Bank has been appointed as transaction advisor and ING Bank NV as independent financial advisor for the share-swap transaction.