Business Mirror - One of the country’s
richest men, Lucio Tan, is embarking on a landmark asset consolidation
plan that will see his banking, tobacco, real estate, airline, beer and
liquor empire all housed under one publicly-traded company.
Tan’s
chosen firm is listed rum maker Tanduay Holdings Inc., which will be
renamed into LT Group Inc., a filing to the Philippine Stock Exchange
late Tuesday showed.
Once
completed by the September target, the transaction would create one of
the country’s biggest conglomerates with a coveted mix of
consumer-related investments.
Analysts said the
consolidation is likely a form of estate planning for the 78-year-old
taipan, whose humble beginnings as an immigrant from China have garnered
as much attention as the multi-billion dollar business group he would
one day establish.
Forbes
Magazine recently ranked him as the Philippines’s second richest
man—just behind SM Group founder Henry Sy— with a fortune estimated at
$4.5 billion.
Based
on the disclosure, LT Group will acquire unlisted Tan companies like
Asia Brewery Inc. and Fortune Tobacco Corp. Also to be acquired are
listed Eton Properties Philippines Inc., Philippine Airlines and its
low-cost unit Air Philippines.
Tan’s
two banks, namely, Philippine National Bank (PNB) and Allied Banking
Corp., which will be merged, are also set to be acquired by LT Group
Inc.
“As a
representative of the Philippine economy, it will be a very attractive
company. The problem is what the valuation will be,” Joseph Roxas,
president of stock brokerage firm Eagle Equities Inc., said in a phone
interview.
Trading
of Tanduay’s shares were halted Wednesday ahead of the announcement.
The company last closed at P5.10 per share, giving it a market value of
P20.30 billion.
Based
on the disclosure, Tanduay will acquire 90 percent of Asia Brewery, the
maker of Manila Beer, Colt 45 and Coors, via a cash subscription of
P1.8 billion, or P1 per share based on par value. Asia Brewery also owns
firms that produce the Cobra energy drink and Absolute distilled
drinking water.
Tanduay
is also buying 83 percent of Fortune Tobacco for P1.64 billion, also at
P1 per share, in a cash subscription. Fortune Tobacco owns 49.6 percent
of PMFTC Inc., a venture with Philip Morris Philippines Manufacturing,
which makes and distributes brands Philip Morris, Marlboro, Hope,
Champion and Fortune brands.
Moreover,
Tanduay will acquire 98.1 percent of Eton Properties, a listed property
developer with projects in Metro Manila and a township development in
Laguna province, via the acquisition of its unlisted parent companies.
The
company did not disclose financial details on Eton's transaction and
other publicly listed companies involved in the deal. Eton had a market
value of P4.6 billion on Tuesday.
The
disclosure also said that 49.84 percent of flag carrier Philippine
Airlines Inc. and 50.97 percent of Air Philippines will be acquired by
LT Group. Tan’s partner in both airlines is conglomerate San Miguel
Corp., which has vowed to bring the Asia’s oldest carrier back into the
black by the second year of its takeover.
PAL Holdings Inc., the listed owner of both airlines, had a market value of P39.58 billion on Tuesday.
Tanduay
said it is buying 34.79 percent of PNB by acquiring 11 holding
companies that own the stake and 27.62 percent of Allied Banking by
buying out two firms that hold the stake. PNB had a market value of
P49.6 billion, based on current prices.
“The
board of directors believes that the enlarged portfolio will provide
the corporation with significant opportunities for synergies and
business growth,” Tanduay said in its disclosure.
It
said proceeds from a recent P5 billion top-up equity sale will be used
to finance these investments, altering the earlier use of proceeds
intended to grow Tanduay’s liquor business.
For more details on Eton properties, you may e-mail reby_ramirez@yahoo.com or contact her at 0922.883.9308
/ 0916.4044.555 / 0919.699.3572 / 4044-534.
For latest update on real estate
development and its RA 9646, the Real Estate Service Act of 2009, visit
www.ra9646.com.
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