SMC shortlists Pure Foods bidders to 2

MANILA, Philippines - The race for San Miguel Pure Foods Co. Inc., the country’s biggest hotdog maker, is now down to two frontrunners, according to diversifying conglomerate San Miguel Corp.

In a mobile text message yesterday, San Miguel president and chief operating officer Ramon S. Ang said the food, drinks and packaging firm has narrowed down the list of interested buyers for its 49-percent stake in Pure Foods from four to two.

Ang said the remaining two bidders which he refused to identify, will proceed to further due diligence prior to final negotiations.

Among those that were earlier reported to have submitted bids for Pure Foods, which San Miguel estimates has a value of $1.8 billion, were Washington-based private equity firm Carlyle Group, Universal Robina Corp. of the Gokongwei family, the Cebu-based Aboitiz Group, and the Campos family.

San Miguel is scouring funds to move into faster-growing businesses including energy, telecommunications, infrastructure and mining.

Pure Foods, which holds the San Miguel Group’s processed meats, poultry, livestock, feeds and dairy operations, accounts for 63 percent of the hotdog market and 40 percent of the local poultry market. It is also into the canned and processed meats business in partnership with American meat company Hormel.

The company expects to post a 10- to 15-percent growth in net income this year 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 in the same period in 2009, on revenues of P18.2 billion.