AGI buys backdoor listing vehicle for Emperador

Taipan Andrew Tan-led Alliance Global Group Inc. has entered into a deal to acquire 75 percent of technology firm Touch Solutions Inc., gaining a backdoor listing vehicle for liquor unit Emperador Distillers Inc. (EDI).

In a disclosure to the Philippine Stock Exchange Thursday, AGI said it had struck an agreement to subscribe to up to 15 billion shares of TSI at par value to be issued out of the proposed increase in the authorized capital stock of TSI.

TSI recently obtained its stockholders’ approval for the increase of its authorized capital to 20 billion common shares with a par value of P1 per share.

As part of the transaction, AGI will transfer shares of EDI to TSI, whose bylaws will be amended to change the corporate name to Emperador Inc.

In its disclosure, AGI said it would buy the 15 billion TSI shares at par value, suggesting that P15 billion worth of EDI shares would be infused into the company.

In a separate disclosure, TSI said its seven directors had resigned. In their place, new directors from the AGI group had been elected. Tan is now the chair of TSI while Winston Co, who heads EDI, was named president.

The PSE suspended trading on TSI Thursday pending submission of a comprehensive corporate disclosure on the transaction. TSI had a market capitalization of P749.22 million based on its last traded price of P10.98 per share on Wednesday.

This transaction allows Emperador to tap the local stock market to raise funds for expansion. It was earlier reported that this unit is investing P5.8 billion to acquire more assets and scale up operations in Spain over the next 12 months as part of its goal to become a strong global brandy brand.

Shareholders of TSI, its backdoor listing vehicle, recently approved the company’s planned equity offering.

EDI produces Emperador Gold and Emperador Light brandies and a line of flavored alcoholic beverages called The Bar. It recently introduced Emperador Deluxe, which is bottled in Spain.

AGI attributed Emperador’s growth to increased sales of the world’s best-selling brandy, Emperador. This brand sold over 31 million cases last year, mostly under the product Emperador Light.

In Spain, EDI earlier invested in Bodega San Bruno and Grupo Emperador Spain S.A. This deal covers the acquisition of a sizable inventory of “high-quality, well-matured brand,” and 509 hectares of prime vineyard in Toledo, Spain.

The next phase of Emperador’s investment in Spain will include the acquisition of more vineyards and other brandy production facilities.