SMC ends share offer ahead of sked due to strong demand

MANILA, Philippines – San Miguel Corp. closed yesterday its equity offering ahead of schedule on strong demand for its shares, according to the local underwriters.

Ed Francisco, president of BDO Capital, said the local underwriting group (which includes BDO Capital), ATR Kim Eng and SB Capital, had no more shares to sell so they stopped accepting orders. ATR and Kim Eng reportedly sold all their shares as early as Monday, the start of the local offering, which was supposed to run until Friday.

As of Tuesday night, Francisco said the issue was around two times oversubscribed.

Francisco said there was a huge demand for the shares that even local brokerage houses kept asking for more. The common shares were priced at P110 apiece or a discount of 28 percent to the last market price and the bottom of guidance.

San Miguel raised a total of $900 million – $600 million from exchangeable bonds and $300 million from secondary common shares – during institutional roadshows and bookbuilding in Southeast Asia and Britain.

The company had planned an $850 million issue, less than a fifth of what it had planned earlier this year.

Trading of San Miguel shares has been suspended since April 13 and will resume on May 5. It last closed at P153 each share.

The offering involved the sale of shares held in treasury and shares of Top Frontier Investment Holdings Inc, SMC’s largest stockholder with a 47.5-percent stake. The sale will also raise the conglomerate’s public float.

Proceeds from the offering will help fund a P22-billion investment in infrastructure projects being offered by the government.

San Miguel, the dominant player in the local food and drinks sector, has been aggressively moving away from its core businesses to shift to power, mining, infrastructure, telecommunications and oil refining, which the group identified as the next sources of growth for them.

It partly owns power retailing giant Manila Electric Co,, which accounts for more than 29 percent of the installed capacity on the main island of Luzon.