5 February 1998: The government has recently given the go-ahead for the sale of Philippine San Miguel“s 48% stake, and President Fidel Ramos announced possible negotiations.
San Miguel B shares, whi…
5 February 1998: The government has recently given the go-ahead for the sale of Philippine San Miguel“s 48% stake, and President Fidel Ramos announced possible negotiations. San Miguel B shares, which are open to foreigners, have been rising ever since reports that Hong Kong-based First Pacific, had raised its stake in San Miguel from 2% to 6.4%. First Pacific subsequently dismissed the report, but analysts believe it is the strongest contender to take over San Miguel. First Pacific has reportedly disclosed that it had taken a 2% stake in the company last year and had held talks with allies concerning the purchase of a “significant strategic stake”. Philippine presidential elections are set for May, and the takeover of San Miguel depends on the resolution of a decade-long dispute over a San Miguel stake held by the government. As reported earlier, the shares were sequestered in 1986 by the Aquino government on the grounds that they had allegedly been fraudulently acquired by Eduardo Cojuangco, a former associate of the late President Ferdinand Marcos, under the Marcos regime. A legal battle between the government and Mr. Cojuangco has been ongoing, as rightful ownership of the shares is still trying to be established. Analysts believe a deal is possible whereby, in return for supporting the administration“s presidential candidate, Cojuangco will be given ownership of about 20% of San Miguel, which will then be sold to First Pacific. More than a decade after the fall of Marcos, reports say Cojuangco remains “an influential kingmaker,” but he is also said to be seeking guarantees that any deal agreed now will not be torn up by the next administration. First Pacific is understood to have had contacts with Cojuangco and with the Philippine government regarding a potential takeover. “If a deal is to be struck, then it will be soon so that it doesn“t get involved in May“s presidential election, or it will have to wait until the dust settles after the poll,” said one Hong Kong analyst. Shares in First Pacific plunged earlier this year, losing more than 40%, partly because of the group“s exposure to battered Asian markets but also because of investors“ concerns over San Miguel. Shares have since regained ground, climbing 10% to HK$ 2.25. The government has 11 of the 15 San Miguel board seats and usually votes with San Miguel management. However, reports say that in this case, the chief executive and chairman, Andres Soriano, may be outvoted.