San Miguel food unit prices shares at low end of range

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SAN MIGUEL FOOD and Beverage, Inc. (SMFB) has priced its follow-on offering (FOO) at P85 per share, the low end of its indicative price range of P85-P95, which would allow it to raise as much as P39.19 billion in fresh capital before the year ends.

In a disclosure to the stock exchange on Thursday, SMFB said the secondary share sale will consist of 400.94 million common shares held by parent San Miguel Corp., plus an over-allotment option of up to 60.14 million shares.

The final price is also way below the maximum price of P140 per share SMFB stated when it first announced the FOO.

Amid the stock market’s continued weakness, the listed firm last week announced it had reduced the size of its offering. It earlier planned to sell up to 1.02 billion shares consisting of 887 million shares, with an over-allotment option of up to 133.05 million.

The payment and delivery of the offer shares is scheduled for Nov. 12.

All proceeds of the share sale will be used for SMC’s investments, although the company has yet to provide further details. SMC’s has core interests in infrastructure, petroleum, power generation, mining, and the food and beverage sectors.

SMFB is conducting the FOO to comply with the minimum public ownership rule of at least 10%. The company’s public float fell to 4.12% after the consolidation of the San Miguel group’s traditional businesses earlier this year.

After the merger, SMFB now has Ginebra San Miguel, Inc., San Miguel Brewery, Inc., and the former San Miguel Pure Foods Company, Inc. under its portfolio.

The FOO comes amid market volatility, which has prompted Del Monte Philippines, Inc. and Cal-Comp Technology (Philippines), Inc. to postpone plans to conduct an initial public offering.

SMFB named Standard Chartered Bank as the company’s financial adviser for the issuance.

It has also tapped J.P. Morgan Securities Plc, Morgan Stanley Asia (Singapore) Pte., and UBS AG Singapore Branch as the offer’s joint global coordinators. Deutsche Bank AG, Hong Kong branch and Goldman Sachs (Singapore) Pte., will act as joint book runners, while BDO Capital & Investment Corp. and BPI Capital Corp. will act as local lead underwriters.

SMFB’s net income went up by 20% to P15.4 billion in the first six months of 2018, following a 15% increase in consolidated revenues to P137.4 billion. The consolidated food and beverage company expects to generate P33 billion in earnings this year.

Shares in SMFB dropped 0.95% or 80 centavos to close at P83 each on Thursday. — Arra B. Francia