Corporate News

San Miguel poised to bag shares in Rockwell Land

Posted on December 27, 2011

DIVERSIFIED CONGLOMERATE San Miguel Corp. is keen to hold on to the Rockwell Land Corp. shares it is poised to receive as property dividends.

“[Rockwell Land] is a good company and we will keep our stake there,” San Miguel President Ramon S. Ang said in a chance interview last week, noting that there were no future plans to sell its investments in the upscale developer.

This, as Manila Electric Co. (Meralco), has moved to divest its entire 51% stake in Rockwell Land by releasing shares in the developer as property dividends.

San Miguel is among those that will be receiving the Rockwell land shares as the conglomerate’s subsidiary San Miguel Pure Foods Co., Inc. holds 5.24% or 59 million shares in Meralco as of end-September this year, making it Meralco’s fifth-biggest shareholder.

Lopez-led First Philippine Holdings Corp., a key Meralco’s stockholder is set to pocket Rockwell Land shares, adding this to the 549% share it already holds in the luxury developer.

Rockwell Land had said it is looking list on the PSE by way of introduction as early as the first half of 2012 after the dividend declaration as it looks to build more residential or mall projects next year.

CLSA Asia-Pacific Markets will be serving as financial adviser for the developer’s local bourse debut.

Rockwell Land was formed in 1995 after the shutdown of the Lopez Group’s thermal power plant in Makati City. It is the property firm behind the 15.5-hectare Rockwell Center in Makati along with several residential developments.

An analyst said San Miguel’s move to retain its Rockwell Land investment was more or less already expected.

“It’s a normal transaction given San Miguel’s recent moves toward diversification,” said analyst Astro C. del Castillo, managing director of brokerage First Grade Finance, Inc. in a telephone interview yesterday.

San Miguel may be strategically positioning itself in the property market, especially in the office and retail segments, said analyst Justino B. Calaycay, Jr. of brokerage Accord Capital Equities Corp. in a separate telephone interview yesterday.

At present, San Miguel holds investments in real estate via property arm San Miguel Properties, Inc., which incurred a P118-million loss in the third quarter due to lower revenues and higher operating expenses in the said period.

The parent’s third quarter consolidated net income meanwhile dove by 53% to P3.596 billion versus last year’s P8.233 billion due to a surge in cost of sales and administrative expenses.

This brought San Miguel’s nine-month net income to P11.9 billion, 6.3% lower than P12.7 billion recorded in the same period last year.

Shares of San Miguel rose by 0.77% to P117.90 yesterday. Meralco dipped by 0.40% to P247. -- Franz Jonathan G. de la Fuente