Stock Commentary

Figaro and Monde Nissin execute deal for 15% stake

Merkado Barkada
Figaro and Monde Nissin execute deal for 15% stake

Figaro Coffee Group [FCG 0.8 3.7%] [link] disclosed that it had signed a subscription agreement with Monde Nissin [MONDE 13.5 2.3%] on February 2, for MONDE’s purchase of 820 million primary (new) shares of FCG at P1.00/share, and that it has already received the full payment of P820 million for the shares from MONDE. While the new shares have already been issued and are now considered “outstanding”, FCG has 180 days to get the shares listed with the PSE.


This one is still a head-scratcher for me.

I get it from FCG’s perspective, of course. If they needed some cash on-hand to fund expansion, and someone came knocking that was willing to pay a premium to buy nearly P1 billion worth of shares, why wouldn’t you take that deal? No brainer. It’s the other side of the deal I don’t get. Unless there’s an understanding between FCG and MONDE that we’re not aware of, the surface-level aspects of this deal just don’t look that great for MONDE shareholders.

What do you get for your P820 million? Was P1.00/share the right price? When the deal was being negotiated, FCG’s market price was somewhere in the P0.60s range. From an optics point of view, they’re almost lucky that suspicious pump happened that drove FCG shares up to the P0.90s in the days before the deal was announced.

I wonder how the MONDE group felt about signing those docs yesterday when FCG started the day worth P0.81/share, 20% below what it just paid for its minority stake. Given that MONDE’s shares will probably be underwater (worth less than they paid) when they’re listed, I doubt there’s that much of a dump risk for FCG’s other shareholders.



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