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San Miguel Rises Most in 2 Years on Top Frontier Share Dividend

Oct. 18 (Bloomberg) -- San Miguel Corp., the largest company in the Philippines by sales, rose the most in more than two years after saying it will declare 240.2 million shares of majority owner Top Frontier Investment Holdings Inc. as a property dividend.

San Miguel climbed 6.5 percent to 85 pesos at the close in Manila trading, the largest advance since Jan. 27, 2011, trimming this year’s loss to 19 percent. The benchmark Philippine Stock Exchange Index advanced 0.7 percent to the highest close since Aug. 14.

Every San Miguel shareholder will receive one share of Top Frontier for every 10 San Miguel common shares they own. All Top Frontier shares will then be listed by introduction on the stock exchange. The fair value of Top Frontier is 178 pesos a share, San Miguel said in an exchange filing yesterday.

“Not only are investors getting shares of Top Frontier for free,” said Bernard Avinante, an analyst at Wealth Securities Inc. The decision also “removes an overhang on the stock, which is its cross-ownership structure. It will answer the question of who owns who.”

Listing by introduction allows companies to float their shares on an exchange without making an initial public offering.

Top Frontier owns 66 percent of San Miguel, which in turn owns 49 percent of Top Frontier, according to data compiled by Bloomberg. Directors of Top Frontier include Ramon Ang, Inigo Zobel, former trade minister Roberto Ongpin, Ferdinand Constantino and Eric Recto, who are also either executives or board members at San Miguel.

San Miguel President Ramon Ang wrote in a mobile-phone message yesterday that Top Frontier’s listing will allow San Miguel to raise funds for expansion and address the issue of cross holdings.

“People are buying San Miguel shares because they are motivated to own Top Frontier, expecting the latter to get listed and perform well in the future,” Jomar Lacson, an analyst at Campos Lanuza & Co. in Manila, said by phone. “Investors are speculating a lot and I think they’re wrong. While Ramon Ang said Top Frontier will list, he didn’t say when. The only asset of Top Frontier is San Miguel itself, so why buy a company that owns that same company?”

To contact the reporters on this story: Cecilia Yap in Manila at; Norman P. Aquino in Manila at

To contact the editors responsible for this story: Chua Baizhen at; Michael Patterson at

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