Consolidated SMC food, beverage unit’s market cap seen at $12B

Conglomerate San Miguel Corp. expects its consolidated food and beverage business under San Miguel Food and Beverage Inc. to fetch a market capitalization of about $12 billion after a follow-on offering slated for later in the year.

San Miguel is planning a follow-on offering of shares of its enlarged consumer food business, first to be folded into San Miguel Pure Foods Co. and eventually rebranded, expecting to raise about $1.5 billion, based on a disclosure to the Philippine Stock Exchange yesterday.
The conglomerate confirmed a wire report that about $1.5 billion would be raised from the planned sale of shares.

Asked how much of Purefoods would be placed out, San Miguel president Ramon S. Ang said the sale would be based on a $12-billion market capitalization.

The $1.5-billion share accounts for some 12.5 percent of Ang’s projected market cap of the consolidated food and beverage business.

To date, Purefoods is valued by the stock market at P100 billion or about $2 billion.

The consolidation of the traditional businesses into PureFoods Co. will reduce the company’s free float to 4.13 percent. This means that a follow-on offering is necessary to remain listed on the local stock exchange.

The Securities and Exchange Commission (SEC) has directed the PSE to require listed companies to maintain a public ownership of at least 20 percent to maintain their listing.

SMC earlier announced a plan to consolidate its traditional businesses into PureFoods, creating a new local consumer powerhouse with the infusion of P336.35 billion worth of shares in its beer and other beverage businesses. In addition to its existing food businesses, Purefoods will own 51.2 percent of beer giant San Miguel Brewery Inc. and about 76 percent of Ginebra San Miguel Inc. (GSMI).—DORIS DUMLAO-ABADILLA