San Miguel evaluates bids for Pure Foods stake

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. is studying offers from bidders for a stake in its food unit, San Miguel Pure Foods Co. Inc.

“We have received the bids and there has been very keen interest from potential buyers. We are now proceeding with the evaluation of the bids along with our financial advisor JP Morgan,” San Miguel president and chief operating officer Ramon S. Ang said in a mobile text message Friday.

The San Miguel official, however, did not indicate when they would make a decision regarding the Pure Foods stake. The conglomerate earlier said it might pursue a secondary offering of its shares should the bids turn out to be unacceptable.

Among those earlier reported to be interested in Pure Foods, which has an estimated enterprise value of $1.8 billion, include global private equity firms Carlyle Group and CVC Group, and Gokongwei-led food manufacturing unit Universal Robina Corp.

The Carlyle Group is a global alternative asset manager with more than $90.5 billion under management. With over 1,300 investors in 71 countries, the group focuses on management-led leveraged buyouts, strategic minority equity investments, equity private placements, consolidations and buildups, and growth capital financings.

CVC, on the other hand, is one of the pioneering venture capital firms in Australia with investments in over 70 businesses across all industries. It has participated in over 20 initial public offerings and trade sales. 

Others that were earlier reported to have expressed interest to bid for Pure Foods include the Campos Group which owns leading pharmaceutical firm Unilab Industries Inc., and Century Canning Corp.

The 120-year-old conglomerate is trimming its stake in Pure Foods to 51 percent as it diversifies away from food and drink operations into power, mining, telecommunications and infrastructure.

Pure Foods accounts for 40 percent of the local poultry market and 63 percent of total hotdog sales. It is also into the canned and processed meats business in partnership with American meat company Hormel.

The food group is bullish on its prospects this year with net earnings seen to grow between 10 percent to 15 percent from P2.7 billion in 2009. In the first quarter this year, the company posted a net income of P872 million or six times the amount reported the same period in 2009 on revenues of P18.2 billion. Income from operations grew more than two-fold to P1.4 billion.