Tender offer set for Cosmos stockholders

With its purchase of the majority stake in Cosmos Bottling Corp. (CBC) completed last week, the San Miguel group will move on to the mandatory tender offer requirement of the Securities and Exchange Commission by next month.

In a disclosure to the Philippine Stock Exchange, CBC said Atlantic Industries and Philippine Bottlers Inc. will execute the purchase of all of the softdrink company’s outstanding common and preferred shares to CBC stockholders of record as of Jan. 17, 2002.

The tender offer, set within a one-month period between Jan. 31 to Feb. 28, 2002, will involve over 2.31 billion common shares priced at around P6.045 million and nearly 2.45 preferred shares at approximately P12.09 each. The entire transaction is valued at P14 billion.

Atlantic Industries is a subsidiary of The Coca-Cola Co. (TCC) of Atlanta, Georgia, USA, while PBI is a subsidiary of Coca-Cola Bottlers Philippines Inc., a 65-35 partnership between San Miguel and TCC.

AI will account for 61.4 percent of the outstanding capital stock while the remaining 38.6 percent will be held by PBI.

The valuation method/principle was employed in determining the price per share, taking into account a combination of the discounted cash flow analyses done by the SMC group and its financial advisor ABN Amro as well as comparison of multiples of comparable transactions.

Aside from the shares, the SMC group’s buyout will include assets of CBC and its two subsidiaries-Cosmos Visayas Bottlers Inc. and Cosmos Bacolod Bottlers Inc. – but excluding Cosmos’ interest in First Water Bottling Corp. – Conrado Diaz Jr.