THE Securities and Exchange Commission (SEC) has dismissed the request of Ginebra San Miguel, Inc.’s (GSMI) minority shareholder to nullify San Miguel Corp.’s (SMC) share swap with its food and beverage units for lack of merit.
Josefina Multi-Ventures Corp. last year filed a petition claiming that SMC should have conducted a tender offer to all minority owners of the company before pushing through with its share-swap transaction.
“The SEC Special Hearing Panel dismissed the petition for lack of merit,” SMC said in a disclosure to the stock exchange on Tuesday.
Josefina Multi-Ventures claimed SMC violated the mandatory tender offer rule prior to the merger of its traditional businesses, which saw the consolidation of San Miguel Pure Foods, Inc., San Miguel Brewery, Inc. (SMB), and GSMI under San Miguel Food and Beverage, Inc. (SMFB).
The P336.35-billion share swap was completed in September 2018. SMFB now has a 51.16% and 78.26% stake in SMB and GSMI, respectively, while SMC’s ownership in SMFB has increased to 95.87% from 85.37% before.
The minority shareholder said that SMC should have made a tender offer after acquiring 75% of SMFB, citing Section 19.2 of the Securities and Regulation Code which stated that a person or group of persons acting in concert acquiring at least a 35% stake in a listed firm must conduct a tender offer.
“Clearly, the basis for the application of the mandatory tender offer rule is purely quantitative; once the threshold of 35% is reached, a tender offer is required under the law,” Josefina Multi-Ventures said in its petition.
The company said that without the tender offer, minority shareholders had no alternative but to accept the share-swap transaction.
However, the SEC has already ruled that the tender offer rules do not apply to the transaction since it involves a de facto merger or consolidation, wherein change in control will only result to indirect from direct.
Shares in SMC gained 0.56% or a peso to close at P180 each at the stock exchange on Tuesday. — Arra B. Francia