Danding won’t hike SMC stake

Businessman Eduardo "Danding" Cojuangco has announced that he has no plans of increasing his 20-percent stake in San Miguel Corp., thus, quashing speculations that he is set to acquire controlling interest in the country’s biggest food and beverage conglomerate.

Cojuangco was reacting to news reports that he would buy government ’s shares that have recently been freed for privatization by an order issued by President Estrada.

Should he decide to buy the shares when they are privatized, Cojuangco would be the single biggest shareholder in SMC, giving him control of its various business interests in beer brewing and other beverages, meat production and processing, packaging, property development, financing and agribusiness.

However, Cojuangco categorically stated that he does not plan to increase his stake in SMC, saying he is perfectly satisfied with his present holdings and would welcome anyone who wanted to buy into the company.

"I am happy with what I personally own already," Cojuangco. "I have 20 percent and it is big enough for me, so I won’t be buying at more shares. Kahit mahulog pa ang langit . (Even if the sky caves in)."

According to Cojuangco, moves to oust him from SMC through a hostile takeover remains a distinct possibility but would not be a problem. He hinted that he would not be launching expensive efforts to stave off such attacks, saying that he would leave it up to the other stockholders of the company.

"My outlook is this: We have managed the company quite well in the last few years," Cojuangco explained. "If the stockholders of San Miguel think that we should be replaced and if the replacement can run it better, then why not? I will even support that."

Cojuangco did not even rule out the possibility that SMC’s competitors would actually make moves to take over the company, specifically Asia Brewery which is owned and operated by Taipan Lucio Tan.

SMC’s By-Laws do not allow direct competitors to own interests in the company or any of its subsidiaries, but Cojuangco said it was up to the interested parties to "do their research."

"I am sure that anyone interested would do their due diligence review," he said. "It is up to them. If it is not possible, they can look for ways so that it can be done. It’s how you do business," Cojuangco said.

The food and beverage giant had earlier announced it was buying back about 10 percent of its publicly listed shares estimated to be worth P3.6 billion, a practice usually done by companies with sufficient retained earnings and whose shares were considered undervalued.

Analysts said the buyback program would be favorable to SMC, noting that its buyback programs last year and early this year, which was estimated to have already reached around 10 percent of its total stock, had significantly improved the company’s earnings per share.

But analysts said it also confirmed that SMC had very little investment options at present, following its purchase of Australian premium beer brewer, J. Boag.

Cojuangco would not comment on the progress of SMC’s talk with RFM Corp. which had been eager to enter into a joint-venture with the company at least for their meat business.

With the market constantly wracked by price wars, gluts and the influx of cheap imported meat and meat products, RFM had initiated talks for a possible joint venture to achieve economies of scale that would protect both conglomerates from imports and other imperfections in the market.

However, Cojuangco refused to even say whether SMC is still negotiating with RFM or whether the talks have been shelved for the time being. "I really cannot say. The less said, the less mistake," he said.

SMC is also working on a deal with Coca-Cola Amatil Ltd. of Australia to regain control of Coca-Cola Bottlers Philippines, Inc. (CCBPI) but Cojuangco also refused to give details of the talks.

Awash with cash estimated to amount to P42 billion, analysts said SMC is capable of buying back its shares in CCBPI as well as other businesses it might find worthwhile. However, Cojuangco said SMC is keeping its options open.

SMC has 1.56 billion class "A" and 687 million class "B" shares. Both stocks closed unchanged at P48.50 and P51 respectively at the PSE yesterday. SMC is a consistent market favorite due to its robust earnings.

Latest figures show a 20-percent rise in SMC’s profit from January to October this year to P5.4 billion compared to the same 10-month period last year on the back of robust volume growth across all its business lines.