26 February 1998: In spite of recent reports that First Pacific Co. is no longer interested in a majority stake in the Philippine company, San Miguel Corp. remains on guard against any future takeover…
26 February 1998: In spite of recent reports that First Pacific Co. is no longer interested in a majority stake in the Philippine company, San Miguel Corp. remains on guard against any future takeover bids which “might hurt shareholders”, and not just to protect its management, chairman of the country“s biggest food and beer company, said. “We, as the board, have to try to ensure that any takeover is done in a fashion that is fair to all shareholders,” SMC chairman and chief executive officer Andres Soriano said at a recent news conference. “So we are looking at measures that will protect the shareholders,” while also saying that there is still no law governing corporate takeovers in the country. Soriano added that the company“s legal advisers are being retained “not to help entrench the present management in their position but to protect the interest of the shareholders” in case of a major takeover. Earlier this year, the San Miguel board took on the services of an investment banking firm. These came after First Pacific Co. Ltd. said it was in direct talks with businessman Eduardo Cojuangco to buy his sequestered block. Cojuangco, a known associate of former dictator Ferdinand Marcos, owns 20% of San Miguel which has been sequestered by the government. Soriano, whose family started the brewery but now has less than a 2% stake, said the company still needs the services of its advisers even though First Pacific said it had stopped talks to buy more shares in San Miguel. However, reports say that market players were sceptical regardless of First Pacific“s negations, especially since the company had already bought a 2% stake in San Miguel. “I believe in the newspapers as well as you do,” Soriano said when asked whether he believed First Pacific“s announcement, reported in the local press recently. Other shareholders are the two state pension funds which collectively own 13% and a sequestered coconut levy fund which owns 27%. The rest are owned by private individuals and portfolio investors. Meanwhile, San Miguel announced that a declassification of shares is not about to happen yet. It is not yet set to declassify its “A” and “B” shares, said the company. Soriano said that while the move has been under study for sometime now, “there is no firm recommendation at this time to declassify SMC shares.” Soriano did say, however, “from my personal view, declassification is something that needs to happen.” The cheaper “A” shares are supposedly restricted to Filipino investors while “B” shares are open to foreign investors. If SMC shares are declassified, Soriano said this should put SMC in an “even playing field with the rest of interested parties”. He also said the ruling recently issued by the Department of Justice allowing foreign funds to buy “A” shares as long as the purchase is done through a nonvoting trust encourages local firms to declassify their shares.