SMC Buys 68% of PCOR

San Miguel Corporation (SMC) currently controls 68 percent of oil refiner Petron Corporation (PCOR).

On 15 December 2010, SMC fully exercised its option to acquire 60 percent of the oustanding shares of Sea Refinery Corporation (SRC), a shareholder of PCOR, from SEA Refinery Holdings BV (SEA BV), as provided under the Option Agreement dated 24 December 2008. The SRC block represents 24 million PCOR shares. SMC initially owns 38 percent stake in PCOR before the acquisition of SRC.

SMC started exercising its option on June 15 when it acquired 40 percent of SRC under the option agreement. With the recently sell out from SEA BV of its SRC stake, SMC now owns 100 percent of SRC. SRC owns 50.1 percent of SMC, making it a majority owner of SMC. This brings the SMC stake in PCOR from the initial 38 percent to 68 percent.

Both SRC and SEA BV are subsidiaries of the global fund manager Ashmore Group.

SMC plans to raise its stake in PCOR to as much as 90 percent in the next two months if the Ashmore Group allows them to acquire around 22 percent of PCOR stake.

SRC is an affiliate of the London-based fund, Ashmore Group. The Ashmore Group acquired the 40 percent stake on PCOR from Saudi Aramco in 2008. It afterwards acquired another 40 percent from the Philippine National Government. It also made tender offers to PCOR minority shareholders, bringing its total stake in PCOR to 90.6 percent.

SMC believes that the Philippine's largest oil refining and marketing company is being undervalued despite its opportunities. The remaining free float under PCOR now only runs at 7.5 percent.

Sources:

Alena Mae S. Flores: "SMC takes over Petron," Manila Standard 16 December 2010
James A. Loyola: "SMC completes acquisition of 68% Petron," Manila Bulletin 17 December 2010

Doris Dumlao: "San Miguel secures controlling stake in Petron," Philippine Daily Inquirer 16 December 2010

AEV Sells 77.24% of ATS at 26% Premium

Aboitiz Equity Venture (AEV) accepts the offer of Negros Navigation Company (Nonaco) to purchase its transport subsidiary Aboitiz Transport System (ATS) at a premium of 26.43%. 

On 06 December 2010 (Tuesday), AEV announces the deal that sells its 1,880,489,607 common shares, representing 77.24%, in ATS to Nenaco at a price of USD105 million, equivalent to PHP4.5 billion at PHP43.75 exchange rate. The purchase price will be paid at the closing date of 10 January 2011. The rest of the ATS equity is owned by Jebsen Group of Norway.

In case ATS fails to get the nod of its creditors, Aboitiz & Co. assures a credit line to pay off creditors, which will be payable in 12 months.

Before the sell closes, AEV will acquire 63.5% equity stake of the Aboitiz Jebsen group for approximately PHP355.91 million to control the management, manning and crew management, and bulk transport businesses of ATS. Meanwhile, Aboitiz & Co. will buy 50% stake of Aboitiz Jebsen group in the chartering business for PHP44 million.

AMP Dacutan of Business World reported that  ATS "contributed a net loss of P374 million to Aboitiz Equity Ventures’ bottom line during the January to September period, a reversal from last year’s P331-million profit." Aboitiz Transport System has 2,064 employees and 18 ships operating under the Supercat, Super Ferry, Cebu Ferry and 2GO brands. It is the country’s biggest freight and sea passage provider firm with market shares of 35% and 34%, respectively.

Associated Free Press reported that Nenaco will end up acquiring 93.2% stake of ATS. Meanwhile, the Chinese-ASEAN Marine BV, a private equity fund that the Chinese government controlled through the Chinese-ASEAN Investment Cooperation Fund, will acquire a majority state on Nenaco through a capital infusion that will help pay for the ATS stake.

With the sale, AEV effectively divests a long-losing subsidiary.

JFC Acquires 70% of Mang Inasal

On 17 November 2010 (Wednesday), Jollibee Foods Corporation (JFC) sealed the acquisition of the 70 percent of Mang Inasal Philippines (MIP), a fast-growing grilled chicken restaurant chain for a price of P3 billion. It is the fastest growing network in the Philippine food business industry in the last three years. It is famous for very good tasting Filipino grilled chicken, and has a focused branding.

JFC paid Injap Investments Incorporated, the MIP owner, P1.55 billion at the closing, and another 1.15 billion on November 22 when the purchased will be completed. Ten percent of the purchase price (around P300 million) will be withheld and paid off in three years to cover indemnification, if so becomes necessary, for any errors in seller presentations and warranties.

III will keep the 30 percent. Its current chairmain, Edgar Sia II, founded MIP.

The acquisition will grow JFC's current network of 1,953 stores worldwide as of September end, 1,578 of which are located in the Philippines. JFC has a flagship brand of 703 Jollibee stores. MIP has 312 stores, 284 of which are franchised stores.

Sources

Doris Dumlao: "Jollibee seals P3-B Mang Inasal Deal," Philippine Daily Inquirer 17 November 2010