Tan sells 2.7% AGI stake for P8B

MANILA, Philippines - Tycoon Andrew L. Tan has trimmed his direct stake in his investment vehicle Alliance Global Group Inc. (AGI), raising nearly P8 billion from selling shares to one of the world’s largest fund managers.

In a disclosure, to the Philippine Stock Exchange, AGI said its chairman and CEO sold 278 million shares or 2.7 percent of the outstanding shares through an accelerated overnight equity placement at P28.30 apiece for a total transaction value of P7.86 billion.

It represented a five-percent discount compared with AGI’s closing price of P29.80 each on Thursday. Following the transaction, Tan’s direct ownership in AGI declined to 0.62 percent of outstanding shares.

The discounted private placement allowed the conglomerate to accommodate the strong interest of global investors, its underwriter said yesterday.

“The transaction was conducted in response to a reverse enquiry from one of the largest asset managers globally,” AGI said.

“The reason this investor bought a chunk of AGI is because of their belief in the country and in the company,” Lauro C. Baja III, managing director of sole placement agent UBS Investments Philippines Inc., said in a phone interview.

Baja said the club deal, also referred to as syndicated investment, involved long-term fund managers.

The unidentified global fund manager, which already has investments in other local companies, wanted to increase its exposure the Philippines, Baja said.

Strong consumer spending fueled by overseas Filipino remittances and revenues from outsourcing has buoyed the Philippine economy despite volatility in fund flows. It allowed the country to post one of the fastest economic growth in Asia in the past few years.

In April 2011, AGI raised P9.73 billion through a share sale to private investors. Proceeds of the share sale funded the expansion of AGI’s integrated tourism business.

AGI is into property (Megaworld Group), liquor (Emperador Inc.) fastfood (McDonald’s franchise operator Golden Arches Development Corp.) and hotels and casino (Travellers International Hotel Group Inc.).

In the first quarter this year, AGI’s net income rose by a tenth to P3.94 billion from P3.56 billion a year ago. Revenues increased 3.2 percent to P31.23 billion from P30.26 billion year-on-year due to the strength of the real estate, gaming and liquor businesses.