Cojuangco to sell stake in San Miguel
Diversifying conglomerate San Miguel Corp chairman Eduardo Cojuangco is selling out in favour of a key stockholder group, securities filings showed, changing the balance of power in the 120-year-old conglomerate.
Cojuangco’s share sale will consolidate power in the hands of company president Ramon Ang and former trade minister Roberto Ongpin who owns part of Top Frontier, the stockholder group, and comes as San Miguel, the country’s third-largest listed firm, shifts into high-growth heavy industries.
Top Frontier, a key ally of the San Miguel management, wants to fortify its holdings in San Miguel with share purchase deals worth a total of P79.7 billion ($1.8 billion). No immediate change in business strategy and direction is expected as Ongpin has supported the current management led by Cojuangco.
Ang has been instrumental in shifting San Miguel from its dominant food and beverage businesses into heavy industry such as power, infrastructure, and telecommunications, though this shift could not have materialised without Cojuangco’s approval.
San Miguel’s A and B shares gained 5.8% so far this year, higher than the 2.9% gain in the main index. The market in the Philippines was closed on Monday for election day.
It was not immediately clear why Cojuangco, 74, is selling out but he has been reported to be sickly in the past months. Various media have reported that Cojuangco, who returned as San Miguel chairman in 1998, underwent a procedure in the United States in November to correct an abnormal heart rhythm.
San Miguel has not released a statement on Cojuangco’s health condition. The company also did not immediately respond to Reuters’ requests for comment on the share sale.
Top Frontier entered into two deals that would allow it to raise its stake to at least 60% at the end of 2012 from about 26% at end March, according to San Miguel’s filings with the stock exchange.
The documents showed Top Frontier entered into a share option deal with 44 corporate shareholders of San Miguel — mostly related to Cojuangco — involving 476.72 million A shares and 16.65 million B shares at a price of P75 apiece. The option, worth a total P37 billion, can be exercised until Nov. 2012.
The courts have earlier declared Cojuangco, a close ally of the late strongman Ferdinand Marcos, as the owner of the San Miguel shares after years of disputes. The government had previously claimed ownership of the shares, alleging that Cojuangco used illegally acquired money from coconut farmers during Marcos’ rule to buy into San Miguel.
Separately, Top Frontier entered into a deal to buy the 19.2% stake of Q-Tech Alliance Holdings Inc in San Miguel for P42.7 billion. Q-Tech is an Ongpin-led investment group.
Top Frontier had said in November it would seek to consolidate its holdings in San Miguel with Q-Tech. Following Top Frontier’s entry into San Miguel, the management of the conglomerate said in January it acquired 49% of Top Frontier at an undisclosed amount. ABS-CBN News
