SM Investments sells San Miguel stake

REPORT FROM BUSINESSWORLD SM INVESTMENTS CORP., the listed holding firm of tycoon Henry Sy, has sold its 11% stake in San Miguel Corp. for P27.148 billion. SM Investments, in a letter to the stock exchange, said its board on Wednesday approved the sale of 339.35 million San Miguel Corp. shares at P80 apiece to San Miguel Retirement Plan. San Miguel Corp. earlier announced that two of its units — San Miguel Retirement Plan and San Miguel Properties, Inc. — had bought a 34% stake in the Cojuangco-owned Bank of Commerce, the country’s 16th largest lender, for P2 billion. San Miguel Corp.’s A shares, open to local investors, on Wednesday closed at P59.50, while its B shares ended at P62. Jose T. Sio, SM executive vice-president and chief finance officer, said the company took an "excellent opportunity" to cash in on the San Miguel investment so as to help expand its business interests. "We still believe San Miguel is a company worth investing given its strong brand franchise in beer and its dominant position in the food and beverage business. "However, SM would like to focus on its four core businesses at this time, namely retail merchandising, mall operations, banking and property development," he said. SM said the proceeds of the share sale would be used for general corporates, capital expenditures and other investments. Aside from businesses where it is currently dominant, SM said it was also aggressively pushing its residential and commercial property development projects as well as hotel investments in key cities across the country. "All these projects will require a considerable amount of capital expenditure for the company moving forward," it said. Ron Rodrigo, research head at Unicapital Securities, Inc., said the share sale was a good move for the company. "This is a good move for SM given that they see a lot of opportunity in their current business structure and also the proceeds would be used for their projects." SM Investments has earmarked P95 billion in capital expenditures for the next five years as it continues to expand its shopping malls, retail and banking operations, and its eco-tourism project in Nasugbu, Batangas. For the first six months of the year, the company posted a 16% growth in net income to P5.9 billion as consolidated revenues substantially improved with the acquisition of 28 SM Supermarkets and nine SM Hypermarkets. SM shares on Wednesday closed unchanged at P380. — Lovely Nica P. Lee/BusinessWorld