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SEC approves San Miguel food subsidiary’s P142.81-billion follow-on offering

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By Arra B. Francia, Reporter

THE SECURITIES and Exchange Commission (SEC) has given the go signal for San Miguel Food and Beverage, Inc. (SMFB) to conduct its P142.81-billion follow-on offering, slated to be the largest share sale in the history of the Philippine equities market.

In an e-mailed statement to reporters on Thursday, the country’s corporate regulator announced its approval of SMFB’s plan to sell a total of 1.02 billion shares, consisting of a base size of 887 million shares and an over-allotment option of 133.05 million shares price at P140 each.

The follow-on offering is set to be the largest equities offering in the country, easily surpassing the previous record of P37.7 billion by LT Group, Inc. back in 2013.

The shares included in the offer are owned by SMFB’s parent, San Miguel Corp. (SMC), which will be taking the net proceeds of the follow-on offering amounting to P139.87 billion, assuming that the over-allotment option is fully exercised. SMC said this will be used to fund its infrastructure projects.

The company named J.P. Morgan Securities, Plc, Morgan Stanley Asia (Singapore) Pte., and UBS AG Singapore Branch as the offer’s joint global coordinators. Deutsche Bank AG, Hong Kong branch and Goldman Sachs (Singapore) Pte., will act as joint book runners, while BDO Capital & Investment Corp. and BPI Capital Corp. will act as local lead underwriters.

Standard Chartered Bank has been tapped as the company’s financial adviser.

Following the SEC’s nod, SMFB now needs the approval of the Philippine Stock Exchange.

The company targets to disclose the final price of the offering by Oct. 19. The offering will then run from Oct. 23 to 29, while the crossing of the offer shares is slated for Nov. 6.

SMFB is pushing through with the offering in compliance with the minimum public ownership rule of at least 10%. The company’s public float fell to 4.12% after the San Miguel group merged its food and beverage, liquor, and brewery businesses to form SMFB earlier this year.

The consolidated company now has Ginebra San Miguel, Inc., San Miguel Brewery, Inc., and the former San Miguel Pure Foods Company, Inc. under its portfolio.

The planned share sale comes amid the current volatility in the market, which has prompted Del Monte Philippines, Inc. and Cal-Comp Technology (Philippines), Inc. to postpone their respective initial public offerings until market conditions have improved.

SMFB grew its earnings by a fifth to P15.4 billion in the first six months of 2018, after consolidated revenues also expanded by 15% to P137.4 billion.

Shares in SMFB dropped by 1.06% or a peso to close at P93 each at the stock exchange on Thursday.