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SM drops plan to acquire Goldilocks Bakeshop

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By Arra B. Francia, Reporter

SM RETAIL, Inc., a company owned by the country’s richest man Henry Sy, Sr., has scrapped plans to acquire Goldilocks Bakeshop, Inc., citing changes in the general business environment.

The two parties announced the dissolution of the deal in separate statements on Thursday, saying it was a mutual decision given the various changes in the marketplace since negotiations began.

“Regarding the proposed acquisition by SM Retail of Goldilocks, both SM and Goldilocks have jointly agreed not to pursue the transaction given changes in the general business environment,” SM Investments Corp. (SMIC) said in a statement issued Thursday.

For its part, Goldilocks said these changes “caused us to re-evaluate our position, and to arrive at a decision that we feel is best for both companies.”

“Meanwhile, Goldilocks remains focused on our plans and strategies. In the past few years, we had double-digit growth. We now have over 600 stores to serve our customers nationwide, and we will continue this expansion in order to be more accessible to our customers,” Goldilocks President Richard L. Yee said in a statement.

Talks for a possible partnership between the shopping mall operator and the bakeshop started in August 2017, when Goldilocks said that it sought an alliance with the SM group to further strengthen its brand.

The decision to call off the deal comes less than a month after the Philippine Competition Commission (PCC) gave SM Retail the go-signal to proceed with the transaction.

“They reviewed the circumstances surrounding Goldilocks, where they reassessed the commercial aspects of the transaction… It would seem like these changes in these circumstances happened after we approved the commitments,” PCC Commissioner Stella Luz A. Quimbo told reporters on the sidelines of a forum in Makati City yesterday.

The country’s antitrust body had earlier vented out competition concerns on the deal, citing the “possibility of partial or total foreclosure in the supply of retail space in SM malls to competitors of Goldilocks after its acquisition by the SM Group.”

SMIC is the parent of SM Prime Holdings, Inc. (SMPHI), the country’s leading mall operator and developer with a total of 67 malls.

Another major concern determined by PCC was the “potential for the SM Group to share a competing mall tenant’s business information to Goldilocks, since the mall operator, through its point-of-sale system, has access to sales records of tenants.”

In response, the SM group pledged that it will be giving Goldilocks’ competitors “a fair shake in their lease at all time.” SMPHI also promised not to give Goldilocks access to competitors’ information, which includes sales data captures by the point-of-sales system of mall tenants.

Ms. Quimbo noted the SM group did not ask for compromises with regards to the commitments the commission requested

“Of course it’s unfortunate that it has ended this way. We were actually quite pleased that they had volunteered to address the concerns. We have come to agreement at certain points but, however, obviously a business decision that we respect,” Ms. Quimbo said.

Shares in SMIC dropped on Thursday, losing a peso or 0.1% to close at P1,024 each at the stock exchange. — with reports from Krista Angela M. Montealegre

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