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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#95
10-26

..ayan sa mas mababa na siya nilagay na presyo Tongue

San Miguel food unit prices shares at low end of range

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.


source: https://www.bworldonline.com/san-miguel-...-of-range/
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#96
10-31

SMFB allots up to P41B for expansion until 2020

SAN MIGUEL Food and Beverage, Inc. (SMFB) is investing up to P41 billion until 2020 for the expansion of its food and brewery businesses, noting its existing factories are operating at almost full capacity.

SMFB Chief Operating Officer for Food Francisco S. Alejano III said the food unit is spending P30 billion in the next three years to construct five new feed mills, slaughterhouses for the hogs business, and a new facility for ready-to-eat products. It is also expanding its flour milling plant. “As far as food is concerned, one of our key strategies is expansion, and this is across the different product categories in the food division,” Mr. Alejano said during an investors’ briefing for the company’s P39-billion follow-on offering at the Makati Diamond Residences late Monday.

Two of the five feed mills are slated to be operational by the end of this year, while the remaining three will be completed in 2019. The company is embarking on the feed mill expansion since its existing plants are already at 95% of its capacity.

For the poultry business, Mr. Alejano said they will put up company-owned facilities in the next two years amid rising consumption of chicken in the country. The facilities will include slaughterhouses for hogs under the Monterey brand.

SMFB is also expanding the capacity of its flour milling plant by 72%, since its current facility is now operating at full capacity.

“We already reached 100% for flour, and we’re not even very strong in the Visayas and Mindanao region. So there’s lots of opportunity for growth in that part of the business,” Mr. Alejano said.

Meanwhile, the company has already expanded its processed meats facility’s capacity by 50%, and plans to further increase this by 50% next year. Hotdogs and canned food products are part of the processed meats category.

SMFB will also be offering ready-to-eat products soon, as it completes the facility in Sta. Rosa, Laguna next year. Mr. Alejano said the facility can produce meat products, viands, bread, and sauces, among others.

“We have a kitchen that can mix or put them together so that we can sell it from there…. The market trend is that customers want food that they can just heat. May ulam na, may rice na,” Mr. Alejano told reporters on the sidelines of the briefing.

On the other hand, the company announced that it will be spending up to P11 billion until 2019 to put up two breweries in Northern Mindanao and Sta. Rosa, Laguna with a capacity of two million hectoliters each. This will be added to its current capacity of 18.8 million hectoliters.

“We will be spending up to P11 billion up to next year, that will also include minor capex that will increase our effective capacity like building CCT (cylindrical conical tanks) to improve the cellar capacity of one of our breweries,” the company said.

SMFB said it has no plans to expand its spirits business for now as it still has sufficient capacity.

The food and beverage unit of listed conglomerate San Miguel Corp. is currently conducting a P39.19-billion follow-on offering, where it looks to sell up to 400.94 million common shares with an over-allotment option of up to 60.14 million shares at P85 apiece.


source: https://www.bworldonline.com/smfb-allots...ntil-2020/
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#97
11-13

...press release lang si Ang  Smile  mahirap hulihin nasa utak nyan

SMFB to raise public float up to 30%

SAN MIGUEL Food and Beverage, Inc. (SMFB) looks to hike its public float up to 30% in the next few years, following the conclusion of its P34.08-billion share sale last week.

SMFB President and Chief Executive Officer Ramon S. Ang answered in the affirmative when asked if he sees another follow-on offering (FOO) in the future, depending on market conditions.

“When market improves later on in the next few years, I think. We intend to offer more shares to the public, maybe eventually up to 30% public float. So plus 18%,” Mr. Ang told reporters after the listing ceremony of shares from its FOO at the Philippine Stock Exchange (PSE) on Monday.

The food and beverage giant said in a disclosure to the stock exchange last Friday that it sold a total of 400.94 million shares at P85 each, bringing its public float to around 12%, from 4.12% prior to the offering.

The share sale represents less than half of initial size of the offering at up to 1.02 billion common shares, consisting of 887 million shares plus an over-allotment option of up to 133.05 million shares. The final price was also below the maximum offer price of P140 the company’s issue managers has set.

“The valuation was given by bankers we hired, on account of the company’s market leadership, the profitability, and the sector, beer, food. If you look at the multiples, the pricing per share should be P140. But the reason why the price was lower because there’s this crisis,” Mr. Ang said in a mix of Filipino and English.

“But even at this economic situation we were able to go out, no one else has done so. Because of the company’s good reputation, even at this situation, we can still proceed,” he added.

SMFB will be using the funds to finance the construction of 10 breweries for its beer business, which would effectively double its capacity in the next three years.

Mr. Ang said the breweries will be located in Ilocos, Pangasinan, Sta. Rosa in Laguna, Negros, Cagayan de Oro, Bacolod, Cebu, and Sariaya in Quezon. Each will have a capacity to produce 2 million hectoliters each, for a total of 20 million hectoliters. This will be added to the company’s current capacity of around 22 million hectoliters.

The company earlier said each facility will cost $100 million, for a total of $1 billion for the entire expansion.

Asked on the company’s outlook, Mr. Ang said the beer and food businesses are poised to deliver double-digit growth this year, while Ginebra San Miguel, Inc. is on track to double its profit.

SMFB’s net income rose by a fifth to P15.4 billion in the first six months of 2018, following a 15% increase in consolidated revenues to P137.4 billion. It expects to generate P33 billion in earnings this year.


source: https://www.bworldonline.com/smfb-to-rai...-up-to-30/
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