SMC mulls biggest sale of stocks to public

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. may sell up to 30 percent of its outstanding common shares to widen its public float, according to a top company official.

San Miguel president Ramon S. Ang said the company currently has over two billion outstanding shares, and the sale of 30 percent of that could potentially be the biggest share sale in corporate history.

With San Miguel’s market capitalization of P193 billion, a 30-percent stake would be worth around P57.9 billion.

San Miguel stocks closed at P88.10 each yesterday, up 4.88 percent from Tuesday’s finish.

Beginning Nov. 8, shares of San Miguel will be removed from the list of companies comprising the main market barometer, the Philippine Stock Exchange index or PSEi, as the conglomerate’s public float level had fallen below the new 10-percent threshold.

The PSEi is the basket of stocks of the country’s most traded, most liquid and well-capitalized listed firms. It is generally considered as a benchmark of the stock market’s performance.

To be included in the PSEi, a listed company must satisfy five criteria – the free float level, liquidity, volume turnover, tradability and free float market capitalization.

Last year, San Miguel swapped preferred shares for common stocks held by certain shareholders, including the Philippine government. Those preferred shares account for 29 percent of San Miguel’s outstanding stock, while close to 73 percent of outstanding common shares are in the hands of Top Frontier Investments Holdings Inc. and Q-Tech Alliance Holdings Inc.

San Miguel, which makes nine out of every 10 beers sold in the Philippines, began selling parts of key businesses in 2007 to fund a shift into energy and infrastructure. Among its investments include a joint venture with Qatar Telecommunications Co. a stake in power distributor Manila Electric Co., and an option to take a majority of top local refiner Petron Corp.

The company is also in talks to buy stakes in railways, toll roads, airport projects and coal mines.