Biz Buzz
Happy problem?
It’s been a while since the controversy broke out into the public’s consciousness and people who follow the ups and downs of cigarette manufacturer Mighty Corp. are wondering what’s holding up the deal with a foreign “white knight.”
Under this supposed deal, a foreign firm—in partnership with a local tycoon—will buy the last fully Filipino-owned tobacco industry player and pay billions to the Wongchuking family to extinguish their tax obligations to the government.
This rumored white knight, of course, is none other than British American Tobacco, which owns the Pall Mall brand, and will supposedly come in with retail magnate Lucio Co for a P32-billion buyout of Mighty’s longtime owners.
The deal, according to word on the street, is that at least P20 billion of the proceeds will be used to settle the tax dispute with the Bureau of Internal Revenue, with the balance going to the Wongchukings who, in turn, will commit to exit the tobacco business altogether.
So what’s holding up the deal?
Biz Buzz heard that there is another foreign player interested in Mighty. That’s because the Bulacan-based manufacturer has supposedly caught the attention of the executives of this large international cigarette firm, which has long been trying to gain a firmer foothold on the Philippine market.
According to our source, Mighty’s distribution network especially in areas outside Metro Manila, focusing on the low-end buyers where it was able to capture 25 percent of the market, was particularly interesting to the would-be buyer.
And who is this interested foreign player? None other than Japan Tobacco Inc., according to word on the street.
Japan Tobacco has been operating in the Philippines for many years now, but has struggled to make a dent in the market of late despite its cigarette brands that are niche market favorites like Winston and Camel. So it’s not difficult to see why it would be interested in Mighty’s business.
Of course, for a player like Japan Tobacco to be able to upset the acquisition schedule of British American Tobacco means it would have to offer a better price. And if our source is correct, it did just that.
How much better? “Over P40 billion,” said our source.
An offer of that magnitude is bound to cause another problem for the embattled Wongchukings, who are said to be in advanced negotiations with their first suitor. But it’s probably a “happy problem” if the deal is sealed anywhere near this amount. —Daxim L. Lucas
New Ayala hotel in Sicogon
Property giant Ayala Land Inc.—betting big on Sicogon Island in Western Visayas as a tourism estate hub—has unveiled its first hotel offering in the area.
Balay Kogon is a cluster of modern Filipino-inspired casitas that promises personalized service by the locals, sea-to-table home-cooked meals and an array of sea-to-summit adventures such as treks up Mt. Opao and island-hopping to the mythical Islas de Gigantes.
After a soft opening in December, Balay Kogon is expected to have 26 casitas—quaint cottages inspired by traditional Filipino architecture that open to the calming views of Mt. Opao, Tumaquin Island and Liog rock formation—by the end of this year. Based on its website, these accommodations are currently being offered from P5,100 to P6,100 a night.
There are only six of these casitas open for now, increasing to 10 by next month.
ALI has so far earmarked an initial investment of P1 billion for infrastructure and other development projects on Sicogon Island. The first phase of development will include the construction of a 1.3-kilometer runway and airport facility as well as a jetty port, which is set to open this year.
Based on the master plan, the estate will also have a resort town center with retail shops surrounding a 4.3-hectare lagoon and a series of accommodations, including a bed and breakfast, a budget-friendly hostel and a 50-room boutique hotel with direct access to a five-kilometer coastline with pristine ivory sand. There will also be a mix of commercial and residential establishments and an integrated transport system catering to local and international markets.
ALI, together with joint-venture partner Sicogon Island Development Corp. (Sideco), is developing the Sicogon Island Tourism Estate in Carles, Ilolio, on the pillars of “balanced, accessible and sustainable development.”
Following the sustainability principles adopted in ALI’s other tourism estate developments such as Lio in El Nido Palawan, Sicogon is envisioned to be a model for “sustainable” planning and construction. Retail shops and beach front hotels will only have three floors and will have a setback of at least 40 meters from the coastline. Some 282 hectares will be kept as protected forested area.
