MARKET HEADLINE: SHORT SELLING BY OCTOBER

San Miguel Food and Beverage, Inc.
#91
9-3

...yaiks! Big Grin

SMFB follow-on offering at risk after minority holder files suit

THE current follow-on offer of San Miguel Food and Beverage Inc. (SMFB) is at risk of being delayed after a minority holder filed a suit questioning the share-swap agreement that created the country’s largest food and beverage company.

In its petition submitted to the Securities and Exchange Commission (SEC), Josefina Multi-Ventures Corp., a minority owner of Ginebra San Miguel Inc., said the conglomerate should have made a tender offer to all the minority owners of the company when the deal was made this year.

Josefina Multi-Ventures is seeking to nullify the share swap involving San Miguel Corp.’s shares in Ginebra in exchange for shares of San Miguel Food and Beverage Inc., which the conglomerate is now planning to sell through a follow-on offering.

Jose Mario Buñag, the lawyer for Josefina Multi-Ventures, in his letter said the tender offer is mandatory since San Miguel acquired about 75 percent of SMFB under the share swap when the Securities Regulation Code requires a tender offer for all other owners of the firm for acquisitions of at least 35 percent.

The companies involved Ginebra, San Miguel Brewery Inc. (SMB) and San Miguel Pure Foods Inc., which was renamed SMFB when the deal was made.

Buñag said the conglomerate may have obtained an SEC ruling that the tender offer rules do not apply to the transaction since there is a de facto merger or consolidation or that the change in control is merely from direct to indirect.

“SMC and SEC are both wrong. In fact, the SEC flatly and inexplicably contradicts its previous ruling…involving Matsushita Electric Industrial Co. Ltd. of Japan, which wanted to transfer its shares in Matsushita Electric Philippines Corp. consisting of 80 percent of the shares to one of its wholly owned companies that a tender offer is required,” he said.

He said control did not shift from direct to indirect, since San Miguel and SMFB are two completely different publicly listed corporations with different personalities and shareholders.

San Miguel consolidated its food and beverages businesses by transferring all its equity in Ginebra and San Miguel Brewery to San Miguel Pure Foods Co. in exchange for shares.

As part of the share swap, Pure Foods increased its authorized capital so it will have more shares to issue to San Miguel in exchange for shares of Ginebra and SMB.

SMFB will raise some P141.8 billion in proceeds from its follow-on offering, through the sale of 1.02 billion common shares at a maximum price of P140 apiece. The amount of shares is equivalent to 20 percent of outstanding shares of SMFB.

Some 887 million common shares were its primary offering and 133.05 million shares as its overallotment option.


source: https://businessmirror.com.ph/smfb-follo...iles-suit/
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#92
10-5

SEC approves San Miguel food subsidiary’s P142.81-billion follow-on offering

THE SECURITIES and Exchange Commission (SEC) has given the go signal for San Miguel Food and Beverage, Inc. (SMFB) to conduct its P142.81-billion follow-on offering, slated to be the largest share sale in the history of the Philippine equities market.

In an e-mailed statement to reporters on Thursday, the country’s corporate regulator announced its approval of SMFB’s plan to sell a total of 1.02 billion shares, consisting of a base size of 887 million shares and an over-allotment option of 133.05 million shares price at P140 each.

The follow-on offering is set to be the largest equities offering in the country, easily surpassing the previous record of P37.7 billion by LT Group, Inc. back in 2013.

The shares included in the offer are owned by SMFB’s parent, San Miguel Corp. (SMC), which will be taking the net proceeds of the follow-on offering amounting to P139.87 billion, assuming that the over-allotment option is fully exercised. SMC said this will be used to fund its infrastructure projects.

The company named 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.

Standard Chartered Bank has been tapped as the company’s financial adviser.

Following the SEC’s nod, SMFB now needs the approval of the Philippine Stock Exchange.

The company targets to disclose the final price of the offering by Oct. 19. The offering will then run from Oct. 23 to 29, while the crossing of the offer shares is slated for Nov. 6.

SMFB is pushing through with the offering in compliance with the minimum public ownership rule of at least 10%. The company’s public float fell to 4.12% after the San Miguel group merged its food and beverage, liquor, and brewery businesses to form SMFB earlier this year.

The consolidated company now has Ginebra San Miguel, Inc., San Miguel Brewery, Inc., and the former San Miguel Pure Foods Company, Inc. under its portfolio.

The planned share sale comes amid the current volatility in the market, which has prompted Del Monte Philippines, Inc. and Cal-Comp Technology (Philippines), Inc. to postpone their respective initial public offerings until market conditions have improved.

SMFB grew its earnings by a fifth to P15.4 billion in the first six months of 2018, after consolidated revenues also expanded by 15% to P137.4 billion.


source: https://www.bworldonline.com/sec-approve...-offering/
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#93
10-9

...should be good news for FB Smile

SEC: Cases filed vs SMFB may not impact follow-on offering

THE Securities and Exchange Commission (SEC) said cases filed against San Miguel Food and Beverage Inc. (SMFB) may not slow down its P142-billion follow-on offering, as the agency earlier confirmed there is no need to make a tender offer on the minority owners of the company.

SEC Commissioner Ephyro Luis B. Amatong told reporters that the country’s largest conglomerate has earlier on sought the confirmation of the agency that there’s no need for a mandatory tender offer based on the current rules.

“We found two bases to confirm that there’s no need for the mandatory tender offer. First, there’s no change in the ultimate parent company. Under the tender-offer rules, if there’s a change in the ultimate parent even if it’s several levels up, you have to do a tender offer. If there’s no change, why would you do a tender offer?” Amatong told reporters at the sidelines of a sustainability summit of SM Investments Corp.

“Number two, the transaction is akin to a merger or consolidation among companies. In which case under our rules will not apply,” he said.

“But we are looking into their complaints, and they’re going to do due process,” he said.

San Miguel Corp. consolidated its food and beverages businesses by transferring all its equity in Ginebra San Miguel Inc. and San Miguel Brewery Inc. (SMB) to San Miguel Pure Foods Co. in exchange for shares. It then renamed Pure Foods into its current name.

As part of the share swap, Pure Foods increased its authorized capital so it will have more shares to issue to San Miguel in exchange for shares of Ginebra and SMB.

The amount of shares it is selling is equivalent to 20 percent of outstanding shares of SMFB. The company needs to do the follow-on offering as soon as possible as it already dropped below the minimum public float of 10 percent.

Its free float level is currently at 4.12 percent.

It is selling 887 million common shares as its primary offering and 133.05 million shares as its over-allotment option at P140 apiece.

Josefina Multi-Ventures Corp., meanwhile, is seeking to nullify the share swap involving San Miguel Corp.’s  shares in Ginebra in exchange for shares of SMFB.

Jose Mario Buñag, the lawyer for Josefina Multi-Ventures, in his letter said the tender offer is mandatory, since San Miguel acquired about 75 percent of SMFB under the share swap when the Securities Regulation Code requires a tender offer for all other owners of the firm for acquisitions of at least 35 percent.

Buñag said the conglomerate may have obtained an SEC ruling that the tender-offer rules do not apply to the transaction, since there is a de facto merger or consolidation or that the change in control is merely from direct to indirect.


source: https://businessmirror.com.ph/sec-cases-...-offering/
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#94
10-16

BIR confirms San Miguel share swap transaction is tax-free

DIVERSIFIED conglomerate San Miguel Corp. (SMC) has received clearance from the Bureau of Internal Revenue (BIR) for the tax-free transfer of its common shares to its newly consolidated food and beverage unit.

In a disclosure to the stock exchange on Monday, SMC said the BIR issued last Friday BIR Rule No. 010-2018, confirming the tax-free transfer of its common shares in San Miguel Brewery, Inc. (SMB) and Ginebra San Miguel, Inc. (GSMI) to San Miguel Food and Beverage, Inc. (SMFB).

The share swap transaction includes the transfer of 7.86 billion shares in SMB and 216.97 million shares in GSMI to SMFB, in exchange for 4.24 billion new common shares in SMFB to be issued to SMC out of its capital increase. The transaction is valued at P336.35 billion.

With the tax exemption, SMC said it will apply for a certificate authorizing registration of SMFB’s ownership over the SMB and GSMI shares in the stock and transfer books of the two companies.

The transaction forms part of SMC’s consolidation of its traditional businesses under SMFB, which now holds its liquor, brewery, and food and beverage units. Following the share swap, SMFB now holds 51.16% and 78.26% in SMB and GSMI, respectively. SMC will also increase its stake in SMFB to 95.87% from 85.37%.

The consolidation intends to create a “significant consumer food and beverage vertical market under SMC,” while also aiming to enhance its trading liquidity.

SMFB is now looking to raise up to P142 billion in a follow-on offering to comply with the minimum public ownership rule of 10%, as its public float fell to 4.12% after the share swap.

The company has already secured approval from the Securities and Exchange Commission to proceed with the share sale, consisting of a base size of 887 million shares and an over-allotment option of 133.05 million shares priced up to P140 each. Funds raised from the offering will be used to fund SMC’s infrastructure projects.

The share sale is currently awaiting approval from the Philippine Stock Exchange.

As per its latest prospectus, SMFB targets to price the offering by Oct. 19, with the offering to run from Oct. 23 to 29. The shares will then be crossed at the exchange by Nov. 6.

SMFB’s net income expanded by 20% to P15.4 billion in the first six months of 2018, following the 15% increase in consolidated revenues to P137.4 billion.


source: https://www.bworldonline.com/bir-confirm...-tax-free/
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