First Pacific earlier agreed to purchase from Italy’s Cirio a 40-percent stake in Philippines-based Del Monte Pacific for $164 million and will move to control the whole company after the launch of a tender offer. The sale price represents about a 20-percent premium to Del Monte’s recent share price and values the whole company at $420 million.
The Lorenzos’ Macondray and Co. Inc. (MCI), which owns 22 percent of Del Monte, has until tonight to match the $164 million offer of First Pacific. "If we can’t match the bid, we would have to sell at that price. The concept of working together (First Pacific and Macondray) has never been discussed," MCI head Martin Lorenzo said.
MCI, Del Monte Pacific’s second biggest shareholder, must waive its right to match First Pacific’s offer for the 40 percent stake so that the purchase can proceed. MCI is owned by the Lorenzo family, which also owns Lapanday, a company engaged in banana exports.
To acquire the 78 percent of shares held by Cirio and other parties, Macondray would need P200 million to P300 million, Lorenzo earlier said. "It is very difficult to let go of our shares in Del Monte."
PCGG commissioner Ricardo Abcede told The STAR that they are now looking at reports that Joselito "Butch" Campos Jr. who is reportedly financing the bid of MCI to match First Pacific’s offer is using around 4,100 acres of real property located in Tarrant County, Texas, as collateral to acquire financing from several banks here and abroad.
A federal lawsuit was filed in Fort Worth Texas in April this year by a human rights group led by the American attorney Robert Swift, alleging that these lands be returned to the Philippine government. Robert Swift was responsible for arguing and winning the $2-billion human rights judgement against the Marcoses in Hawaii. With interest, that judgement has now grown to $3.8 billion.
According to official sources, when the elder Jose Yao Campos surrendered certain properties to then PCGG Chairman Jovito Salonga, he declared the Texas properties as not ill-gotten and were therefore excluded from the assets of Campos surrendered to the Philippine government. Swift’s group, however, claims that there is evidence to show that these lands are ill-gotten.
"We are looking at this matter on all legal angles. We are looking at historical documents and so far, we have discovered that these properties were not surrendered by the elder Campos," Abcede said in an interview.
And because of the legal problems they might encounter in the future, the prospective bank financiers are reportedly now having second thoughts on whether or not to accept the Texas properties as collateral.
Documents provided the PCGG, including land registry records, show that Butch Campos directly owns and controls over 4,180 acres of ranchland in Tarrant County, Texas. The lands, acquired in the ’70s and ¡®80s by dummy corporations, among them Western Hills Development, Capital Syndications, and Mapletree Investment Co., were reportedly bought for more than $50 million, and are expected to be worth much more, now that land values have risen in Texas and oil deposits have recently been located on the land.
According to officials close to the transaction, Campos approached the Lorenzo’s shortly after news of a bid by First Pacific to purchase all of Del Monte Pacific. Sources said Campos was able to convince the Lorenzos to allow him to attempt and raise funds.
"I am certain that the Lorenzo family, as well as the local and international banks they have spoken to have no idea that the assets Butch is offering to back his loans are really assets belonging to the people of the Philippines,"the official said
The confidential source added, "You can bet that should it be likely proven that the Campos family deliberately withheld these assets from the PCGG, and any other authorities, any prior agreements for criminal immunity may be taken off the table."
The elder Campos, has been described as the crony closest to former President Marcos, and had gone on record at the time of his agreement with the PCGG in the ’80s that he had set up more than 40 dummy corporations in the US for the purposes of acquiring large tracts of land. According to sources, the Campos family laundered hundreds of millions of dollars of Marcos money into Canadian and US real estate, retailing and oil and gas investments.
Among the lands in Texas is a 330-acre parcel located in the vicinity of Dallas, where one of the dummy companies, a Margaux Development Co., plans to build a two-million square foot shopping center. An American official at the Margaux Company recently told the Fort Worth Star-Telegram newspaper that the investors are from the Philippines.
Butch Campos has reportedly been desperate to raise funds to match First Pacific’s bid, especially since his unceremonious dumping from the Campos family flagship business, United Laboratories, in December last year. The family was reportedly upset with Butch’s management style, and placed his sister Joy Campos, to head Unilab. Butch Campos has meanwhile focused on the family’s ketchup and vinegar business.
According to company insiders, Butch Campos has promised a special arrangement with certain Lorenzo family insiders, as part of their agreement to permit him to raise money for the counter-offer. Apparently the family was reluctant to try and raise the funds themselves, because the $420 million was considered too high.
The sale to First Pacific marks the last significant disposal of assets from Cirio, the Italian food company whose fraudulent collapse was soon eclipsed by the larger implosion of Parmalat, the dairy group. Cirio has been managed by administrators who include Mario Resca, the chairman of McDonald’s in Italy.
First Pacific will make a mandatory offer to buy the remainder of Del Monte Pacific after it completes the purchase of the stake held by Cirio, according to First Pacific managing director Manuel Pangilinan.