JG Summit raises P8.8B to fund Meralco acquisition

The Gokongwei group raised P8.8 billion from the sale of shares in flagship conglomerate JG Summit Holdings Inc., partly to fund its acquisition of a 27-percent stake in Manila Electric Co.

In a disclosure to the Philippine Stock Exchange, the group said that 220 million shares of JG Summit were sold at P40 apiece on Nov. 25 through an equity placement.

The equity deal was priced at a 4.1-percent discount to Monday’s closing price of P41.70 a share.

On Tuesday, JG Summit shares were crossed through block transactions at the local bourse. At the end of trading, JG Summit slipped by 6.83 percent, to close at P38.85 per share. It was the most actively traded stock at the local stock for the day and the biggest lagger among companies included in the main-share PSE index.

Of the shares sold to new investors, 98.082 million consisted of treasury shares freed up by JG Summit, while 121.918 million consisted of secondary shares placed out by shareholders.

“The proceeds from the offering will be used to partially fund the Meralco acquisition and for general corporate purposes,” the disclosure said.

In October, JG Summit agreed to pay P72 billion for the 27-percent block held by San Miguel Corp. in Meralco, to be funded through a mix of equity and debt.

JG Summit said the P8.8-billion fresh equity deal was likewise done “in order to widen the shareholder base of the company, and as a response to strong demand for the company’s stock.”

CLSA Limited and UBS AG acted as joint bookrunners for the transaction.