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SMC further reduces SMFB's FOO size, pegs price at P85/share.

By James A. Loyola

Diversified conglomerate San Miguel Corporation (SMC) has further reduced the size of its follow-on offering (FOO) of shares of San Miguel Food and Beverage, Inc. (SMFB) to P39.19 billion after setting the final offer price at P85.00 per share.

In a disclosure to the Philippine Stock Exchange, the firm said it is selling a total of 461.08 million secondary SMFB shares, down from the scaled down 522.9 million shares it had planned to sell last week.

SMC said it is selling 400.94 million shares with an over allotment option of up to 60.14 million shares as against the 348.64 million shares and the upsize option of 174.32 million shares it announced last week.

The stake sale would represent about 6.8 percent of the unit's shares.

The offer price of P85 per share is also at the lower end of its price range of P85 to P95 per share announced last week after it initially set the maximum offer price at P140 per share and an offer size of 1.02 billion shares.

JPMorgan, Morgan Stanley and UBS are joint global co-ordinators for the sale, while Deutsche Bank and Goldman Sachs are joint bookrunners. BDO Capital and Investment and BPI Capital are the local lead underwriters.

"Appetite for the Philippine market in general has not been strong, San Miguel Food and Beverage included," said Regina Capital Development Corporation Managing Director Luis Limlingan.

The Philippine benchmark share price index has fallen nearly 19 percent this year, as benchmark interest rates hit seven-year highs and sentiment for emerging markets wanes.

The market weakness has already affected several other share offers. Cal-Comp Technology (Philippines), Inc. last month delayed its $124-million initial public offering (IPO), while Del Monte Philippines, Inc. shelved its $258- million IPO in June.

SMC plans to sell the shares to institutional investors as well as local retail investors while a portion may also be offered to yet-unconfirmed cornerstone investors.

SMC completed the consolidation of its food and beverage businesses last June 29, 2018, thus, the performance numbers reflect the consolidated financials on a comparative basis with last year.

San Miguel Brewery Inc. (SMB) continued its solid performance delivering strong volumes for the first half driven by increased consumption of beer products nationwide.

SMB consolidated revenues reached P62.5 billion, 18 percent higher than the same period last year. Operating income rose 23 percent to P17.3 billion.

Ginebra San Miguel Inc. (GSMI) also recorded a strong first semester performance as net income almost doubled from last year. Revenues and operating income rose 19 percent and 57 percent to P12 billion and P862 million respectively from previous year.

Meanwhile, SMFB's Food Group posted consolidated revenues of P62.9 billion, 12 percent higher mainly driven by the strong performance of Feeds, Poultry and Meats and the Branded Value-Added businesses. Operating income grew 6 percent to P4.7 billion.


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Title Annotation:Business News
Publication:Manila Bulletin
Date:Oct 25, 2018
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