Puregold finalizes S&R deal

MANILA, Philippines - Puregold Price Club Inc. has completed the acquisition of 100 percent of S&R Membership Shopping club through a P16.5-billion share swap, effectively making the upscale retailer a wholly-owned Puregold subsidiary.

In a disclosure to the Philippine Stock Exchange, Puregold said Kareila Management Inc., the operator of S&R, has already issued the stock certificates in the name of Puregold.

Under the deal, Puregold acquired 1.7 million shares of Kareilla in exchange for 766.4 million shares of Puregold. Both firms are controlled by Chinese-Filipino businessman Lucio Co.

The Co family now owns 77 percent of Puregold’s outstanding shares.

The acquisition has allowed Co to consolidate his retailing businesses into a publicly-listed vehicle targeting all market segments and further strengthened the group’s leading position in the industry.

Puregold caters to the lower-income segment with a market share of 16 percent. On the other hand, S&R, which caters to the middle and upper class consumers, has a market share of 3.3 percent.

S&R has a total membership base of over 214,700 across the country. It operates six stores located in Bonifacio Global City, Congressional Ave. in Quezon City; Alabang, Muntinlupa; Aseana business park in Baclaran; San Fernando in Pampanga; and Mandaue City in Cebu.

Established in 2000 in partnership with Price Smart of the US, S&R was eventually acquired by the Co family in 2006.

To capitalize on the growing consumer needs of the mass market, Puregold recently acquired the Parco supermarket chain in a deal valued at around P760 million. The deal involved the purchse of 100 percent of the Gant Group of Companies, the holding company of the Ong family for the six subsidiaries operating the 19 branches of Parco supermarkets.

Of Parco’s total store network, 12 are located in Metro Manila, three in Bulacan and four in Rizal.

The purchase was in line with the Co family’s goal to double the number of its stores by 2015 as it expands into the untapped markets Metro Manila as well as in Visayas and Mindanao.

Puregold, which is now the country’s second biggest retailer next to the SM Group, intends to open 25 stores in 2012 and 2013.