San Miguel’s Petron stake to cost P32 billion

MANILA, Philippines - San Miguel Corp., Southeast Asia’s largest food and beverage company, will have to pay UK investment firm Ashmore Group P32.2 billion to acquire a majority stake in oil refiner Petron Corp. "The price will be the sum of the paid-up capital of SEA Refinery Holdings B.V. (SEA BV) in SEA Refinery Corp. (SRC) and the value of the Petron shares acquired by SRC," San Miguel told the exchange Monday. Under an option agreement inked last month, San Miguel secured the right to buy SRC. Ashmore unit SRC holds 50.1% of Petron, equivalent to 4.69 billion Petron shares priced at P6.85 per share. Ashmore, which has agreed to hand over control, now owns some 91% of Petron after it purchased the government’s 40% stake last month for P25.6 billion. "The option is only capable of exercise by San Miguel and cannot be assigned to any third party," the food and beverage giant said in its disclosure. The agreement is valid for two years from December 24, 2008. On top of the P32.2 billion, San Miguel said it had already paid $10 million to SEA BV as consideration for the option. The conglomerate also said it would be making a tender offer to Petron minority shareholders once it purchases SRC. San Miguel representatives were elected to Petron’s board earlier this month, among them San Miguel President Ramon S. Ang who was named chairman, and San Miguel Chairman Eduardo M. Cojuangco, Jr. and board member Estelito P. Mendoza who became directors. "SEA BV has agreed to allow San Miguel to participate in the management of Petron through the election of representatives in the board and appointment of key officers in Petron," San Miguel said. San Miguel’s current tack has it seeking to move out of its core businesses. — BusinessWorld