SMC to make tender offer to Cosmos minority stockholders

The San Miguel Group will buy out the remaining 16.8 percent stake in softdrink company Cosmos Bottling Corp. through a mandatory tender offer to the minority stockholders by early next year.

SMC corporate secretary Francis Jardeleza told the Philippine Stock Exchange that the proposed date will likewise fall between the third week of January and the first week of February 2002.

He said since the closing date for the Cosmos acquisition is tentatively scheduled for the third week of this month, SMC – through its subsidiary Coca Cola Bottlers Philippines Inc. and the Atlanta-based The Coca-Cola Company – will file the tender offer sheet with the Securities and Exchange Commission (SEC) at least 10 days from this date.

Under the Securities Regulation Code (SRC), a group taking over majority control of a listed company is required to make a tender offer to the remaining minority stockholders, which means offering to buy out their shares at the same price paid to the majority owners.

Based on the share purchase agreement finalized last Nov. 23, RFM Corp. will sell its 83.2 percent shareholding in Cosmos for a total consideration of P11.6 billion or P6.045 per common share. The agreed valuation has reached P14 billion for 100 percent of the softdrink company.

Cosmos stocks barely moved last week as it closed steady at P5.90 per share.

RFM said the valuation method/principle followed in determining the price per share was a combination of the discounted cash flow analyses done by the SMC group and its financial advisor ABN Amro as well as comparison of multiple of comparable transactions.

The Cosmos shares to be acquired consist of 1,926,858,190 common shares and 1,000 preferred shares. Assets to be received consist of assets in Cosmos and its two subsidiaries Cosmos Visayas Bottlers Inc. and Cosmos Bacolod Bottlers Inc., but excluding Cosmos’ interest in First Water Bottling Corp.

The payment for the transaction, which will be crossed at the PSE, will be in cash.