SMC gets deadline to comply with PSE request

The Philippine Stock Exchange (PSE) has given San Miguel Corp. until tomorrow morning to provide accurate, fair and complete disclosure of material facts in connection with the option agreement it signed with Ashmore Unit SEA Refinery Holdings B.V. for the purchase of up to 50.1 percent interest in oil utility giant Petron Corp.

The deadline within which San Miguel was directed to respond to the PSE’s show-cause letter was originally set last Friday but the food and drink conglomerate sought for an extension, which the local bourse granted.

To assist San Miguel in preparing a comprehensive reply/and or disclosure of material information, the PSE issued guide questions instead of requiring San Miguel to submit a copy of its option agreement.

San Miguel was asked to disclose the key terms of the option agreement to include the nature of the option, strike price or exercise price per share, duration of the option, exercise date, option fee/premium, if the option fee will form part of the total consideration upon exercise, any conditions for the exercise of the option, basis upon which the option price exercise was determined, spot price of the underlying shares, any anticipated dividends in the underlying asset, voting agreements regarding Petron, among others.

San Miguel refused to provide the stock exchange a copy of the option agreement, saying it was bound by a confidentiality agreement. It cited Article 1314 of the Civil Code which states that “any third person who induces another to violate his contract shall be liable for damages to the other contracting party.”

“The right of private parties not to disclose agreements between or among them is protected by the constitutional rights of liberty, property and privacy. They continue to be private agreements and the documents evidencing the agreements continue to be private documents, not subject to examination or reproduction by the public,” said Ferdinand Constantino, corporate information officer of San Miguel.

Under the option agreement, San Miguel has the exclusive right to acquire up to 100 percent of SEA Refinery Holdings B.V.’s interest in SEA Refinery Corp. which owns 50.1 percent of Petron. The option may be exercised by San Miguel within a period of two years from Dec. 24, 2008.

Constantino assured the public that while the option agreement does not trigger a tender offer at this time, the conglomerate will comply with all applicable laws, rules and regulations.

San Miguel has not formally acquired any stake in Petron yet but it has already secured three slots on the oil firm’s board of directors by virtue of the agreement with the Ashmore Group.