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Phil. Stock Market Discussions, Comments and Forecast

San Miguel to sell $3B in shares in 2011

MANILA, Philippines—Publicly listed San Miguel Corp. will raise up to $3 billion from the equities market early next year by selling existing shares currently held by the diversified conglomerate.

In an interview, San Miguel president Ramon S. Ang said these “re-issued” shares would likely be priced between P150 and P200 apiece, given the company’s existing and future business prospects.

His comments pushed up the firm’s stocks to a 20-year high, ending at P105 per share Thursday on the Philippine Stock Exchange.

San Miguel’s share price has risen by a total of 41 percent over the last month due to optimism over itsnew businesses and speculation over its share sale.

Ang said proceeds from the sale would be used to fund the conglomerate’s ongoing expansion in the power and infrastructure sectors.

“We can do this as early as the first quarter of 2011,” he said on the sidelines of the government’s Infrastructure Summit in Pasay City on Thursday. “The market clamor is growing.”

The international conference was meant to draw in prospective investors that would bankroll President Aquino’s public-private partnership (PPP) scheme.

Ang explained that the common shares to be sold would come from the company’s existing holdings, as well as from its current roster of major stockholders, all of whom would release a portion of their holdings to the market on a pro-rated basis.

The San Miguel chief had earlier revealed plans to sell up to 30 percent of existing common shares next year, boosting in the process the company’s stock tradingliquidity.

Based on Thursday’s closing price at the PSE, 30 percent of San Miguel’s 2.31 billion outstanding common shares would be worth P138 billion, or about $3.1 billion at the upper end of Ang’s indicated price range.

At the lower end, the company would be able to raise at least $2.3 billion.

San Miguel, which was recently dropped from the PSE’s 30-company main-share index, is not as actively traded as other blue chips partly because of its small public float. Only about 8 percent of its shares are currently held and traded by the public.

About 89.5 percent of San Miguel’s outstanding capitalstock is held by Top Frontier Investment Holdings Inc., which is majority owned by an investor group that includes former Trade Minister Roberto V. Ongpin, businessman Iñigo Zobel and condiments king Joselito Campos.

San Miguel itself is the single biggest voting bloc owning 49 percent of Top Frontier, which also holds a “continuing and exclusive” option to purchase and acquire the 15-percent stake held by tycoon Eduardo “Danding” Cojuangco Jr. until Nov. 19, 2012.

 

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