Monde Nissin takes 15% slice in Figaro Coffee

Monde Nissin Corp., the food manufacturing giant behind Lucky Me! instant noodles, announced an P820-million investment in businessman Jerry Liu’s Figaro Coffee Group, a mid-sized restaurant player looking to ramp up expansion.

Monde Nissin is a P250-billion company led by billionaire Betty Ang, its president. It will get a 15-percent stake in the P4.4-billion Figaro Coffee, the operator of Angel’s Pizza and Figaro cafes that went public last year.

The deal valued Figaro Coffee shares at P1 each, a 12.4 percent premium over its last closing price. It rose 5.62 percent to P0.94 each on Thursday, however, the share price had climbed sharply in the days ahead of the announcement.

Monde Nissin, also listed  on the Philippine Stock Exchange, slipped 2.52 percent to P13.94 per share on Thursday.

Apart from instant noodles, Monde Nissin also makes popular biscuits such as Skyflakes and Fita as well as meat-substitute brand Quorn.

Jonathan Ravelas, a veteran stock market analyst and financial strategy consultant at e-Methods for Business Management Corp., said the investment will help Monde Nissin diversify revenues by giving it exposure in the vibrant restaurant sector.

“It gives them one foot in the door. They’re not talking a full risk but they get to learn more about this market. It’s also a way for them to integrate their [manufacturing] business,” Ravelas told the Inquirer.

He said Monde Nissin can also push some of its products through the restaurants of Figaro Coffee.

“For example, they can sell a noodle pizza or start have a line of veggie meats [using Quorn].

If they need to test a product, it’s easy to use a restaurant,” Ravelas said.

Meanwhile, Monde Nissin will acquire primary shares of Figaro Coffee, meaning the proceeds will be used for the latter’s expansion.

“We are excited with the opportunity to become shareholders in the Figaro Coffee Group as it provides a greater exposure to the food service sector which we view as a potentially attractive avenue for further growth both here in the Philippines and abroad,” Monde Nissin CEO Henry Soesanto said in the statement on Thursday.

Liu, who is chair emeritus of Figaro Coffee, said the investment helps solidify their position as a “very strong and stable” food and beverage company.

“We welcome this partnership with Monde Nissin as we believe a combination of their leadership in the food sector, strength in manufacturing and timeless brand equity, combined with our fast-growing store network and brand strength will yield excellent opportunities,” he said in the same statement.