THE Securities and Exchange Commission (SEC) said cases filed against San Miguel Food and Beverage Inc. (SMFB) may not slow down its P142-billion follow-on offering, as the agency earlier confirmed there is no need to make a tender offer on the minority owners of the company.
SEC Commissioner Ephyro Luis B. Amatong told reporters that the country’s largest conglomerate has earlier on sought the confirmation of the agency that there’s no need for a mandatory tender offer based on the current rules.
“We found two bases to confirm that there’s no need for the mandatory tender offer. First, there’s no change in the ultimate parent company. Under the tender-offer rules, if there’s a change in the ultimate parent even if it’s several levels up, you have to do a tender offer. If there’s no change, why would you do a tender offer?” Amatong told reporters at the sidelines of a sustainability summit of SM Investments Corp.
“Number two, the transaction is akin to a merger or consolidation among companies. In which case under our rules will not apply,” he said.
“But we are looking into their complaints, and they’re going to do due process,” he said.
San Miguel Corp. consolidated its food and beverages businesses by transferring all its equity in Ginebra San Miguel Inc. and San Miguel Brewery Inc. (SMB) to San Miguel Pure Foods Co. in exchange for shares. It then renamed Pure Foods into its current name.
As part of the share swap, Pure Foods increased its authorized capital so it will have more shares to issue to San Miguel in exchange for shares of Ginebra and SMB.
The amount of shares it is selling is equivalent to 20 percent of outstanding shares of SMFB. The company needs to do the follow-on offering as soon as possible as it already dropped below the minimum public float of 10 percent.
Its free float level is currently at 4.12 percent.
It is selling 887 million common shares as its primary offering and 133.05 million shares as its over-allotment option at P140 apiece.
Josefina Multi-Ventures Corp., meanwhile, is seeking to nullify the share swap involving San Miguel Corp.’s shares in Ginebra in exchange for shares of SMFB.
Jose Mario Buñag, the lawyer for Josefina Multi-Ventures, in his letter said the tender offer is mandatory, since San Miguel acquired about 75 percent of SMFB under the share swap when the Securities Regulation Code requires a tender offer for all other owners of the firm for acquisitions of at least 35 percent.
Buñag said the conglomerate may have obtained an SEC ruling that the tender-offer rules do not apply to the transaction, since there is a de facto merger or consolidation or that the change in control is merely from direct to indirect.