MANILA, Philippines ? Conglomerate San Miguel Corp. has struck down proposals made by two shortlisted bidders to acquire a controlling stake in its food unit San Miguel Pure Foods Co.

In a statement Thursday night, San Miguel said its board of directors had limited to a minority stake the planned sale of the food subsidiary. Citing the results of a board meeting dated August 12, the board approved the option to sell up to a 49 percent stake in Pure Foods.

The same statement said the two final bidders ? earlier reported to be the Gokongweis' Universal Robina Corp. and the Campos family's pharmaceutical giant United Laboratories in partnership with the Century Group ? both sought 100 percent ownership of the food company that owns the Purefoods, Magnolia, Monterey, Star, San Mig Coffee, and B-Meg brands.

?At this time, our board has decided that all that should be currently under offer by San Miguel is the sale of a minority stake in our food group,? said San Miguel president Ramon Ang.

Philippine Daily Inquirer sources said URC initially submitted the higher bid for lock, stock and barrel of Pure Foods but the offer contained many conditions. URC also did not agree to put up a cash down payment, as required by San Miguel, ahead of the completion of a due diligence audit.

The race thus afterwards swung in favor of the Unilab-led group, which had already tapped four banking groups ?
Metrobank, Bank of the Philippine Islands, Security Bank and Rizal Commercial Banking Corp. ? to provide financial muscle for to a prospective buy-in. However, Unilab did not settle for a 49 percent stake especially because the banking syndicate backing its bid required the takeover of a majority stake to pave the way for the consolidation of the buying companies with Pure Foods.

Selling a portion of its existing core businesses, San Miguel said, was one way of raising funds to support its ongoing diversification into heavy industries.

San Miguel has yet to announce what its next move on Pure Foods will be. It said another option would be to sell shares of Pure Foods, which has very little public float, through a public offering.

However, analysts said it may also opt to sell shares through a negotiated buy-in deal with a strategic partner willing to be a passive investor in the food company.