San Miguel to acquire Petron
Posted on March 18th, 2010
The country’s biggest oil refiner, Petron Corp., may soon become part of the country’s largest food-and-beverage company, San Miguel Corp. (SMC). The company said it will exercise its option within the year to buy 51 percent of Petron, and at the same time make a tender offer to minority shareholders.
Tender offer allows the minority shareholders to sell their shares at the same price a new investor is offering for a significant block. The tender rule is meant to protect the interest of small shareholders and is triggered when the purchase exceeds 35 percent of the company’s total shares.
San Miguel acquired the exclusive option to buy the share of Dutch Holding firm Sea Refinery Holdings BV (SEA BV) of the Ashmore Group when it paid the $10 million for the rights, which should be exercised within two years, or from December 2008 to December 2010. And once the purchase materializes, San Miguel will acquire control of Petron.
The Ashmore Group is a global asset management company which is listed in the London Stock Exchange. The company has investments in power generation, telecommunication and petrochemicals. It has $36.5 billion in assets.
Ashmore acquired control of Petron when it purchased the government’s 40-percent stake in it from the Philippine National Oil Co. and the rest from the stock market, until its interest reached 90.57 percent.
After which, the company entered into an option-to-buy arrangement with San Miguel which gave the local conglomerate the right to buy up to 100 percent of the share of its local subsidiary called SEA Refinery Corp. (SRC) which currently owns 50.1 percent of Petron.
Because of the possibility for San Miguel to acquire a controlling stake in Petron, its price in the stock market has risen up 7.1 percent to P6.10 apiece, which is its highest since October 2008.
