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Group consolidates holdings in San Miguel

MANILA, Philippines—A group led by San Miguel Corp. president Ramon Ang and former Trade Minister Roberto V. Ongpin has completed the consolidation of the single biggest voting bloc in SMC into Top Frontier Investments Holdings Inc., which now owns 47.5 percent of the diversifying conglomerate.

San Miguel announced that Top Frontier acquired on Wednesday the remaining stake in SMC held by Q-Tech Alliance Holdings, completing the former’s buyout of a 20-percent block of shares.

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Q-Tech sold its remaining 301.6 million shares in SMC to New Frontier at P70 a share for a total block price of about P21.1 billion. The shares were crossed at the Philippine Stock Exchange Wednesday.

Top Frontier is 49-percent owned by SMC itself as represented by Ang while 51 percent is controlled by an investor group that includes Ongpin, his nephew Eric Recto (who is also president of Petron Corp.) and businessmen Iñigo Zobel and Joselito Campos.

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The transaction formed part of a share purchase agreement signed in January 2009 that gave Top Frontier the option to buy the remaining stake of Q-Tech in San Miguel at P70 a share until March this year, the statement said. The first tranche involving 327 million shares was sold by Q-Tech to Top Frontier in April last year together with the tender offer made by the latter to all SMC shareholders.

Q-Tech, a fund put up by Ongpin and some affiliates of London-based fund Ashmore, previously bought the 20-percent stake in SMC that was unloaded by Kirin Holdings of Japan in 2009 for P39.6 billion.

Kirin exited SMC as the local food and beverage giant started a more aggressive diversification into businesses outside its non-traditional interests. But Kirin has since invested directly into SMC’s flagship beer unit San Miguel Brewery as a strategic partner.

Q-Tech and Top Frontier have interlocking directors and shareholders, including Ongpin himself. But among the Q-Tech pillars who are no longer in Top Frontier’s board is Mirzan Mahathir, son of the former Malaysian prime minister, who had previously quit as San Miguel director.

Top Frontier likewise holds the option to buy an additional 493.37 million shares in SMC from tycoon Eduardo “Danding” Cojuangco Jr. for P37 billion. It was earlier reported that Cojuangco had made plans to unload his entire 15-percent equity interest in SMC until Nov. 19, 2012.

Meanwhile, SMC’s flagship unit, San Miguel Brewery, grew its net profit last year to P11.77 billion, up 17.7 percent from a year ago. This increase in 2010 net profit attributable to parent’s equity holders from P10 billion a year ago was on the back of higher domestic beer sales volume and favorable raw material prices.

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TAGS: : Mergers – Acquisitions – Takeovers, Conglomerates
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