Philippines: Process starts for sale of Petron stake to San Miguel

Seems like beer sales may be running out of gas so that San Miguel is getting in the gas business. The government is selling its stake in Petron. It is not right I guess for government to share in profits only the capitalist friends of governments. This is from the Tribune.


Process starts for sale of Petron stake to SMC
12/24/2008
The process for the likely sale of the controlling ownership in Petron to diversified conglomerate San Miguel Corp. has started with the Petron major stockholder
SEA Refinery Holdings B.V. selling 947 million shares equivalent to 10.1 percent of the total outstanding shares in Petron at P6.85 per share through the stock exchange.
State-owned Philippine National Oil Co. (PNOC) also sold yesterday its shareholdings in Petron consisting of 3.75 billion shares or roughly 40 percent of the total outstanding shares in Petron.
“SMC is in the final stages of its negotiations with (British group) Ashmore for an option to purchase up to 50.1 percent of the latter’s stake in Petron Corp.,” SMC said in a statement.
Ashmore unit SEA Refinery Corp. was the likely buyer of the 40 percent Petron stake through the bourse that would raise its ownership to 90.57 percent. The 40 percent Petron had has an estimated value of $541 million.
SMC last week signed a deal with Qatar Telecom to launch wireless broadband and mobile services in the Philippines. It also bought 27 percent of utility Manila Electric Co. (Meralco) for about $607 million in late October.
SMC is diversifying its core food and beverage businesses to shield it from cyclical drops in the sector and fuel stronger growth in the future.
SMC will dip into its huge war chest, which it accumulated from divestments from major overseas businesses and some local units in recent years, to fund its purchases.
SMC, which is involved in beer, beverages, dairy products and food processing, had earlier said it may bid for the government’s stake in the oil refiner.
The company has previously said it intends to venture into such areas as utilities, oil, power and mining.
The deal will give SMC a foothold in the oil industry and comes more than a month after it bought a 27 percent stake in utility firm Meralco for about P30 billion as part of a long-standing plan to exit the food and beverage business in favor of heavy industry.
“The deal will be good for Petron because it is now out of government hands,” an analyst said.