Consumer powerhouse San Miguel Food and Beverage Inc. (SMFB) has tapped an army of banks to sell to the public up to 20 percent of its equity in an offering that could raise as much as $2.4 billion, potentially the largest capital-raising in the history of the local stock exchange.
In a disclosure to the Philippine Stock Exchange on Friday, SMFB’s parent conglomerate San Miguel Corp. (SMC) said its board had approved the sale of up to 1.2 billion common shares of SMFB through a public offering.
Banking sources told the Inquirer the following banks would likely arrange this massive public offering deal: UBS, Morgan Stanley, JP Morgan, Deutsche Bank, BDO Capital and BPI Capital.
In a text message, SMC president Ramon S. Ang said the offering could involve as much as 20 percent of SMFB’s equity.
Based on Ang’s publicly stated target to achieve a $12-billion market capitalization for SMFB, the equity deal can amount to a maximum of $2.4 billion or around P127 billion.
The public offering of SMFB can thus become the largest equity deal in the PSE.
However, the final valuation will be subject to market conditions at the time of the offering, which is expected to be concluded within the year.
If the SMC will hit its desired market valuation for SMFB, stock analysts said this could attract enough foreign inflows to bring back the main-share Philippine Stock Exchange index to the record high 9,000 level.
The details of the offering, however, have yet to be firmed up.
“The terms and conditions of the public offering, including the final issue price, the issue size, the over allotment option, the cornerstone and anchor investor process, the engagement of legal and financial advisors, and the appointment of the stabilizing agent and underwriters as may be necessary have been delegated to management and will be subject to further disclosures of the company and SMFB,” SMC said in its disclosure.
In the first semester, SMFB grew its six-month net income by 20 percent year-on-year to P15.4 billion as the beer, hard liquor and food segments all reported higher earnings. —DORIS DUMLAO-ABADILLA