LISTED VITARICH Corp. is set to acquire the shares of Luzon Agriventure, Inc. (LAVI) in local poultry firm Barbatos Ventures Corp. (BVC) in a bid to expand its income sources.
The company said in a stock exchange disclosure on Wednesday that its board of directors approved the terms of a memorandum of understanding (MoU) between Vitarich and LAVI for the acquisition of the BVC shares held by the latter.
Vitarich said BVC is a private domestic company engaged in poultry production, as well as the processing, raising, and breeding of chickens.
“The transaction is seen to have financial benefits to Vitarich in terms of additional source of income and additional cost savings, with minimal impact on cash flow,” the company said.
“It is also consonant to Vitarich’s plan for improving and ramping up production of dressed chicken and other products for its hotel, restaurant and institutions (HRI) clientele,” it added.
Under the MoU, Vitarich said the acquisition of BVC shares held by LAVI will have conditions such as the conduct of prior diligence and subsequent fairness opinion; consideration subject to actual appraisal value of the business capped at P45 million; payable in installments over three years from 2022 up to 2024; and compliance with regulations of the Securities and Exchange Commission and the Philippine Stock Exchange.
“Should the conditions be fully satisfied and the acquisition of BVC shares eventually materialize, BVC will become a subsidiary of Vitarich,” the company said.
It said the implementation of the MoU consists of three phases, namely: valuation; transfer of ownership and possession of shares; and installment payment. The first phase will commence as soon as the MoU is signed and executed by Vitarich and LAVI, it added.
Sought for additional comment, Vitarich Assistant Corporate Secretary Mary Christine Dabu-Pepito told BusinessWorld via e-mail interview that the company is in discussions to acquire 100% of LAVI’s stake in BVC.
Ms. Dabu-Pepito added that the actual value of the planned acquisition has yet to be determined.
“It is (still) subject to the first two conditions indicated in the disclosure — specifically, the results of Vitarich’s due diligence review and assessment of the fairness of the actual appraisal value, not to exceed a ceiling price of P45 million,” Ms. Dabu-Pepito said.
According to its website, Vitarich is engaged in the business of producing hog, poultry, and other specialty feed requirements.
On Wednesday, shares of Vitarich at the stock exchange rose 4% or three centavos to finish at 78 centavos each. — Revin Mikhael D. Ochave
