MANILA (Reuters) – Philippine conglomerate San Miguel Corp (SMC.PS)(SMCB.PS) said it expects to name a buyer for a 49 percent stake in its food unit by Friday, which could raise more than half a billion dollars for its expansion plans.
Company president Ramon Ang told reporters a 49-percent stake in San Miguel Pure Foods Co Inc (PF.PS) was for sale. Sources have said bidders include private equity firms Carlyle Group [CYL.UL], CVC, and Philippine food firm Universal Robina Corp (URC.PS). Ang declined to confirm the bidders.
Earlier this month, the sources said San Miguel might sell its full stake in the food firm, which holds the group’s processed meats, poultry, livestock, feeds and dairy operations.
The 120-year-old conglomerate has been diversifying away from its food and drink operations into power, mining, telecommunications and infrastructure.
“We will know within the week, Thursday, Friday. It’s up to JP Morgan Chase,” Ang said, referring to the auction adviser.
Pure Foods has a market value of about $1.3 billion, although it is an illiquid stock with a free float of less than 0.1 percent of shares on issue. It traded on June 6 this year for the first time since Jan. 7, 2009.
It closed at 350 pesos on Monday, more than six times higher than its Jan. 7, 2009 close. In May, Ang had said the firm had an equity value of around $1 billion.
Analysts expect San Miguel to use the funds from the sale for its push in heavy industry. Earlier this year, the firm obtained shareholder approval to sell more than 51 percent of its core businesses.
Ang is also chairman of Petron Corp (PCOR.PS), the country’s largest oil refiner. At the oil refiner’s stockholders’ meeting, he said Petron was looking for a foreign partner for a refinery expansion of Petron and may sell a 40 percent stake.
Ang said the stake sale may be worth $1 billion.
“We are looking for foreign companies to help us. There are ongoing talks with most of them,” Ang said, adding PTT of Thailand (PTT.BK) was one of several groups Petron was in talks with.
“PTT is very interested in the petrochemical business so we are still talking,” Ang said.
San Miguel owns more than 20 percent of Petron, largely through its holdings in SEA Refinery Corp, a unit of British investment firm Ashmore Group (ASHM.L). San Miguel has said it plans to increase its stake in Petron by the end of the year.
By Rosemary Francisco
(Editing by John Mair and Valerie Lee)