PSEi slips 1.09% on Jollibee-Coffee Bean deal

Share prices on the Philippine Stock Exchange declined by more than 1% on Wednesday as Jollibee Foods Corp.’s acquisition of The Coffee Bean & Tea Leaf weighed on investor sentiment.

The benchmark PSEi shed 89.97 points or 1.09% to 8,161.49 at the closing bell. The broader All Shares lost 34.71 points or 0.70% to 4,956.24.

“It’s the negative sentiment in JFC today that pulled the market lower. Although, the acquisition of CBTL was good news, the latter’s 2018 bottom line performance was at a loss of $21 million which is equivalent to approximately 12% or 13% of JFC’s profit," Timson Securities equity analyst Jervin de Celis said.

“So this may have scared investors. But this might just be a short-term reaction. JFC is backed by an excellent management team so CBTL is in good hands,” he said.

In a regulatory filing submitted by JFC vice president Valerie Amante, the fast-food giant said the acquisition of CBTL brand will be JFC’s largest and most multinational so far covering a business presence in 27 countries. 

The total consideration for the acquisition is $350 million: 100 million representing 80% of the new holding company for the acquisition and $250 million as advances to the holding company.

Shares of JFC declined by 7.99%, or P21.80, to close at P251 per share from P272.80 on Tuesday.

The PSE implemented a one-hour trading halt after the fast-food giant announced it was buying CBTL. 

In the broader market, foreign funds bought P3.025 billion of shares and sold P3.567 billion for a net selling position of P542.005 million.

More than 2.893 billion shares valued at P6.438 billion, changed hands. Decliners led advancers, 125 to 73, and 57 issues were unchanged. —VDS, GMA News