San Miguel Says Two Bidders Left in Pursuit of Pure Foods Minority Stake
San Miguel Corp., the biggest food and drinks maker in the Philippines, said there are two remaining bidders for a minority stake in its poultry and hot dog unit, down from as many as five.
“The two bidders will proceed to further due diligence prior to final negotiations,” President Ramon Ang said today, without naming them. San Miguel earlier this year valued the unit, San Miguel Pure Foods Co., at $1.8 billion
The Carylye Group was among the bidders for a stake in Pure Foods, the biggest hot-dog maker in the Philippines, Ang had said July 20. The Washington-based private equity firm company was vying against the Gokongwei, Aboitiz and Campos families, he said at the time.
A sale would help replenish the acquisition funds of San Miguel, which is expanding into industries including railways, energy, telecommunications and mining that it says have a return on equity that’s triple that of its “traditional” food and beverage businesses. San Miguel had 121.07 billion pesos ($2.6 billion) in cash and near-cash assets as of March 31, compared with 209.4 billion pesos three months before then.
San Miguel’s A shares, which are reserved for Filipinos, rose 0.75 percent to close at 67.50 pesos in Manila trading., paring their decline this year to 1.5 percent. The company’s B shares, which don’t have ownership restrictions, were unchanged at 68 pesos.
Pure Foods Earnings
Pure Foods’ profit will probably rise 10 percent to 15 percent this year and sales may grow about 10 percent to 83 billion pesos, President Francisco Alejo said May 14.
The company, which also raises poultry, had record earnings of 2.6 billion pesos in 2009 on 75.04 billion pesos sales. It posted 77.19 million pesos net income in 2008 on 71.08 billion pesos of sales.
First-quarter profit at Pure Foods, which has 44 percent of the Philippine poultry market and 63 percent of its hotdog sales, rose to 872 million pesos from 143 million pesos. Sales rose 2 percent to 18.2 billion pesos.
Ang has said he plans to raise $1 billion more by selling assets and plans to spend $2 billion this year on acquisitions. San Miguel, which began as a brewer in 1890, has raised about $3 billion from asset sales since 2008 as it seeks to diversify in a process Chairman Eduardo Cojuangco said will “secure” the company’s future.
To contact the reporter on this story: Cecilia Yap in Manila at cyap19@bloomberg.net
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