The Puregold Price Club in General Mariano Alvarez, Cavite, is one of 31 Puregold stores in South Luzon. Puregold reported that it tripled its net profit in 2011 to P1.54 billion. PHOTO FROM GMACAVITE.COM.
MANILA, Philippines—Retailer Puregold Price Club Inc. sold P6.5 billion worth of secondary shares in an overnight equity deal that widened its public ownership back to 32 percent, the level before it took over the upscale warehouse shopping chain S&R.
Puregold’s controlling shareholders, the family of Lucio Co, sold 250 million common shares at P26 per share in an overnight placement on Wednesday. About 75 investors snapped up the shares of Puregold in an offering that was more than 2.5 times oversubscribed.
“The transaction results in an increased public free float from 23 percent to 32 percent, in line with the public float prior to the acquisition of Kareila Management Corp. that owns the S&R membership chain,” the disclosure said.
UBS Investment Bank acted as sole global coordinator and bookrunner for the transaction.
The transaction was launched with a base offer of 220 million shares at a price range of P26 to P27 per share. Due to overwhelming response from global institutional investors, the transaction was increased to 250 million shares.
Puregold earlier acquired 100 percent of Kareila for P16.5 billion through a share-swap transaction with the Co family, then likewise the controlling shareholder of Kareila. In exchange for the shares in Kareila, Puregold paid the Cos 766.4 million of its common shares.
The consolidation gives Puregold-S&R a combined market share of close to a fifth of the modern retail trade industry, ranking second largest next to the SM group of retail tycoon Henry Sy. Puregold has a current market share of 16 percent while S&R has a market share of 3.3 percent.
Kareila, through its membership shopping business, has a membership base of 215,000 nationwide coming from the A-B market segment, complementing Puregold’s C-D-E market.
S&R was set up in 2000 in partnership with Price Smart of the US and acquired by the Co family in 2006. It has six stores located in Bonifacio Global City; Congressional Avenue in Q. C.; Alabang, Muntinlupa; Aseana business park in Baclaran; San Fernando in Pampanga and Mandaue City in Cebu.
Following the completion of the acquisition of Gant group of companies, Puregold also operates 19 supermarkets operating under the Parco name.