According to RFM vice president Ramon Lopez, their investment banker ING Barings has received "an indication of interest" for the acquisition of SFI’s meat operations from Foremost Farms, the agribusiness venture of beer and tobacco magnate Lucio Tan.
In early August, the Concepcion-owned conglomerate had confirmed being in talks for a possible merger or strategic alliance from Vitarich Corp., another listed poultry processing firm controlled by the Sarmiento family.
Lopez said while Foremost Farms had expressed its intent,"no meeting for discussions have been held yet. It is in a very preliminary stage."
SFI is the latest company being floated for a possible sale even as RFM has yet to finalize its sale of its softdrink subsidiary Cosmos Bottling Corp. to the San Miguel Corp. (SMC) group.
Last week, SMC – through its subsidiary Coca-Cola Bottlers Philippines Inc. and joint venture partner The Coca-Cola Co. of the US – said it had completed its due diligence review of CBC but is reportedly negotiating for a lower price than the earlier agreed P15-billion enterprise value for 100-percent ownership.
Interestingly, SMC also has a strong presence in livestock and meat processing through the San Miguel Food Group. There were, however, no indications yet that SMC would be joining the fray for SFI since it has just acquired another food processing jewel in the Ayala-owned Pure Foods Corp. last March.
Faced by debt and cash flow problems, RFM has embarked on a series of divestments this year to raise capital to service these obligations, part of which involved the redemption of dollar-denominated bonds last May. Among those sold were the Nasdaq listed semiconductor firm Psi Technologies and its tuna processing business.
These divestments form part of their efforts to refocus on the branded food and refreshment business, especially after agreeing to sell Cosmos.
For their part, Vitarich said RFM had approached them "to express its interest in exploring the idea of the two companies getting together," but the company pointed out the plan was broached in a very general and preliminary manner, and no concrete offers or proposals were presented.
"There is no certainty that the talks will be pursued, much less that an agreement will be reached," Vitarich said.