MANILA, Philippines--Universal Robina Corporation of the Gokongwei group, and Unilab, the pharmaceutical firm of the Campos family, are the only ones left standing in the bid to acquire a strategic stake in the country?s largest food company San Miguel Pure Foods Co.

Two sources privy to the bidding process told the Inquirer that URC and Unilab were the two prospective investors picked out by conglomerate San Miguel Corp. to stay in the race.

San Miguel president Ramon S. Ang on Friday said that the two shortlisted bidders would ?proceed to further due diligence prior to final negotiations.?

Ang did not reveal the identity of the investors.

San Miguel is divesting a significant stake in SMPFC to boost its war chest and allow the diversifying conglomerate to raise its stakes in higher yielding heavy industries like power and utilities.

With the help of financial adviser JP Morgan, San Miguel received proposals from a number of investors the other week.

At the start of the SMPFC auction, there were only five bidders.

San Miguel on Friday said that it would only offer a ?minority? stake for sale in SMPFC. But some equity analysts said the bidders, especially URC, would likely negotiate for a majority stake because anything less would mean that the new investor might not be able to use the food unit?s cash flow for expansion.

One source familiar with the initial round of bidding said San Miguel was offering ?either 40 percent or 100 percent? of SMPFC, and that pricing would depend on the scale of the new investor?s acquisition. SMPFC is estimated to be worth around $1.3 billion.

San Miguel?s food unit has a market capitalization of P57.5 billion as of Friday?s close, soaring from only P8.9 billion in the last three months. URC?s market capitalization is a bit higher at P68.3 billion.

SMPFC enjoys the biggest domestic market share in poultry (40 percent) and hotdog (63 percent). Its market share in the canned meat business is estimated at 20 percent. In the corned beef segment alone, the company has an estimated market share of 20 percent, making it the second largest player.

Over the years, SMPFC has diversified into poultry and livestock operations, feeds and flour milling, dairy and coffee, and franchise operations.

Among the food brands in its portfolio are Magnolia, Pure Foods, Monterey, Star, Dari Creme, B-Meg and Pure Blend.

The company used to be owned by the Ayala group. San Miguel acquired Pure Foods in 2001, and consolidated its food operations with it to cement its position as the country?s largest food company.

SMPFC is expected to mesh nicely with URC of the Gokongwei group, which is also involved in a wide range of food-related businesses, including the manufacture and distribution of consumer foods, production of hogs and day-old chicks, manufacture of animal and fish feeds, glucose and veterinary compounds, flour milling, and sugar milling and refining.

For Unilab, this may be its first crack at the food business. Industry sources said that the pharmaceutical giant had been raising funds in the last few months to prepare for expansion into allied industries, which turned out to be its prospective acquisition of a stake in Pure Foods.

Unilab?s bid for SMPFC is widely believed to be independent of the existing food interest of its former chair and CEO Joselito Campos Jr., who now sits on the San Miguel board. Campos, who left the family?s pharmaceutical business years ago, successfully built up his own food and condiments business under the NutriAsia Group of Companies.