SMC Selling Pure Foods Stake

13 November 2012


San Miguel Corporation is selling up to a 25 percent stake in San Miguel Pure Foods Company worth a maximum of P12.5 billion in a secondary stock sale overseas to raise its public float above the required minimum of 10 percent.

In an investors' briefing, Pure Foods President Francisco Alejo III said that, while the target is a 15 percent stake in PureFoods, SMC may sell as much as a 25 percent stake given the liquidity in the market.

Alejo said SMC is selling part of its interest in Pure Foods just to comply with the Philippine Stock Exchange's 10 percent minimum public ownership rule but noted that investors may want to buy more shares than initially offered.

Roberto Benares, managing director of issue underwriter Maybank ATK-Kim Eng Capital Partners Inc., said SMC aims to sell 15 percent of the outstanding capital stock of Pure Foods at a range of P240-P300 per share.

There will also be an over-allotment option that can raise the total number of shares to be sold by SMC.

PSE records show that Pure Foods has an outstanding capital of 166.67 million shares and were last traded at P700 per share. Alejo noted that while the market price is higher, this does not reflect the true value of the company since the stock is hardly traded because it is almost 100 percent owned by SMC (99.92 percent).

Alejo said they plan to go on a roadshow in Singapore, Hong Kong and Kuala Lumpur as well as hold a conference call with investors in London before pricing the shares on November 19, 2012. The shares may be crossed at the PSE on November 20. SMC chief finance officer Ferdinand Constantino said SMC intends to use the proceeds of the offer for general corporate purposes after noting that it is a relatively small amount for the company.