Arisaig Asia invests P2.24B in 7-Eleven store chain

MANILA, Philippines—British Virgin Island-based Arisaig Asia Consumer Fund has invested around P2.24 billion to acquire a 9.23 percent stake in the Philippine Seven Corp. (PSC), the country’s largest convenience store chain.

Arisaig, a fund that usually invests for the long haul, bought 32 million shares of the local operator of the 7-Eleven store chain on September 10, based on a PSC disclosure to the Philippine Stock Exchange. This transaction was part of a total block of 41.26 million shares sold by the company’s controlling shareholders at P70 per share on September 10.

The entry of Arisaig is reflective of increasing foreign investor interest in the resilient Philippine consumer sector. Retailer Puregold Price Club earlier expanded its public ownership as its controlling shareholders sold additional shares to the overseas market in an overnight equity deal. Earlier this year, the Uytengsu family sold a controlling stake in Alaska Milk Corp. at a hefty premium in favor of foreign Dutch dairy giant Royal Friesland Campina.

“I’m meeting with them now and am even happier to have them—they know the industry better than any fund I’ve met,” PSC president Victor Paterno said in a text message.

Arisaig is focused on investing in listed consumer sector businesses in emerging markets and has a depth of experience and research capability in this sector, according to the company’s website. It has more than 100 years of experience in covering consumer companies in emerging markets and undertaken almost 15,000 meetings with target investee companies over the past 15 years. The founders continue to lead the investment process.

Paterno earlier described the fund as a “long-term fund that manages Ivy league endowments.”

The block transaction crossed by Deutsche Bank was worth about P2.9 billion but the remainder was bought by other investors. Based on stock exchange rules, only “significant” changes in ownership—purchases or divestment of more than 5 percent of outstanding stock—are required to be disclosed.

For its part, Arisaig’s Asia Consumer Fund was launched in 1997, its Africa Consumer Fund in 2007 and Latin America Consumer Fund in 2010. Its investors are institutional in nature and include US, European, Asian and Australasian endowment funds, foundations, pension funds and family offices.

PSC grew its first-semester net profit by 38.3 percent to P164.3 million year on year as more 7-Eleven stores were opened while resilient domestic spending boosted sales of each store. In a regulatory filing, PSC reported that system-wide sales went up by 29.1 percent in the first six months to P6.5 billion, driven mainly by the increase in store base and improved average sales registered by mature stores.