SMFB’s P142.8-B equity offering OKd

The Securities and Exchange Commission (SEC) has approved an equity offering of as much as P142.8 billion planned by consumer powerhouse San Miguel Food and Beverage Inc. (SMFB), potentially the largest equity deal in the history of the local stock market.

The SEC announced yesterday that its en banc had approved SMFB’s offering of as much as 1.02 billion in common shares, allowing the company to widen its public float and comply with the requirement for continuing listing.

Parent conglomerate San Miguel Corp. is selling up to 887 million common shares in SMFB with an option to upsize by 133.05 million common shares at maximum price of P140 per share, based on a prospectus submitted to the Securities and Exchange Commission dated Aug. 22.

This implies that the secondary offering of as much as 1.02 billion common shares can bring the market capitalization of SMFB to P826 billion ($15 billion).

With this approval, the follow-on or reinitial public offering of SMFB is targeted by November, San Miguel president Ramon Ang said in a text message.

This offering is seen to break records in the Philippine Stock Exchange. The largest capital market deal in the local bourse so far was likewise undertaken by San Miguel in September 2012 with the sale of P80 billion worth of preferred shares.

San Miguel has mandated JP Morgan Securities Plc, Morgan Stanley Asia (Singapore) Plc and UBS AG Singapore as its global coordinators. Deutsche Bank AG Hong Kong and Goldman Sachs (Singapore Plc) are the joint bookrunners.

The lead local underwriters are BDO Capital & Investment Corp. and BPI Capital Corp., while Standard Chartered Bank is the financial advisor.

San Miguel expects to bring in cornerstone investors who will buy a significant piece of the offering. As this is a secondary share sale, all proceeds will be received by San Miguel for various investments.

SMFB was recently transformed into a consumer powerhouse with the infusion of P336.35 billion worth of shares in beer and liquor businesses held by its parent conglomerate. This means that in addition to the food businesses under San Miguel PureFoods, SMFB now owns the majority of San Miguel Brewery, the country’s leading beer maker, and Ginebra San Miguel, the country’s leading gin maker.