SMC cites strong demand for shares of F&B subsidiary

San Miguel Food and Beverage Inc. (SMFB), the newly consolidated food and beverage powerhouse of San Miguel Corp. (SMC) said investor appetite for the company’s forthcoming share sale is strong despite bearish market conditions.

“Despite what’s happening in the stock market, we are confident we will be able to place out the shares,” SMC president and chief operations officer Ramon Ang said last week.

The market was on a losing streak last week, falling below the 7,500 level. On Friday, the local stock market barometer lost 104.22 points or 1.39 percent to finish at 7,413.15.

But Ang said initial feedback from investors in an ongoing global roadshow for SMFB’s P142.8 billion planned share sale has been encoura-ging.

“There’s very good feedback. Investors are interested in a stable company with a stable cash flow and a big market share in the food and beverage industry,” Ang said.

SMFB commenced last month a roadshow in the US, London and in different countries in Asia including Hong Kong and Singapore to meet with global investors ahead of a planned share sale scheduled to run from Oct. 23 to 29.

“The roadshow started in Asia and some have already gone to Europe and America. We should know in the next few weeks,” Ang said when asked if there is already an indication of the offer price.

The company set a maximum offer price of up to P140 per share and officials are optimistic the final price that would be accepted by the market would on the high end given the rosy prospects of the newly consolidated food and beverage giant.

According to the registration statement filed with the Securities and Exchange Commission (SEC), SMFB’s follow-on offering involves the sale of 887 million secondary shares owned by parent firm SMC and an overallotment option covering 133 million shares.

The final pricing and allocation of the offer shares is set on Oct. 19 while the submission of firm order and commitments by Philippine Stock Exchange’s trading participants is on Oct. 25. The offer period will run from Oct. 23 to 29, according to the timetable, which is still subject to the approval of both the SEC and the PSE.

Ang said despite the slowdown in the stock market, demand is expected to be strong given the rosy prospects of the company.

The deal could be the lar-gest equity offering in

local bourse, surpassing the P38billion share offer of taipan Lucio Tan’s LT Group Inc. in 2013.

SMFB tapped BPI Capital Corp. and BDO Capital & Investment Corp. as local lead underwriters; J.P. Morgan Securities, Morgan Stanley Asia, UBS AG Singapore Branch as joint global coordinators; Deutsche Bank and Goldman Sachs as joint bookrunners; and Standard Chartered Bank as financial adviser.

Part of the proceeds would be used for investments in the SMC Group including capital and funding requirements of future projects, according to the registration statement.

In all, the diversified conglomerate has a pipeline of big-ticket projects including breweries and food facilities for SMFB; airports, roads, bridges and train projects for the infrastructure business and a new portfolio of renewable energy projects for SMC Global Power, the energy arm.