SMC to convert 80% of offered shares

MANILA, Philippines - Nearly 80 percent of the total shares under San Miguel Corp.’s exchange offer had been tendered for conversion into preferred shares of the diversifying food and beverage conglomerate.

In a disclosure to the Philippine Stock Exchange, San Miguel said a total of 873.17 million common shares, comprising 476.3 million Class A and 396.88 million Class B shares, had been offered to be converted to Series “1” preferred shares.

The offering, which ended Sept. 21, involved up to 1.1 billion common shares which were exchanged at a ratio of one preferred share for every one common share held.

The preferred shares, priced at P75 per share or a 22 percent premium over its common shares, have a dividend rate of eight percent per annum and will be listed on the exchange.

The share swap option was intended to address concerns about the new thrusts of San Miguel, which has recently diversified into capital intensive businesses like oil (Petron Corp.), power distribution (Manila Electric Co.), and telecommunications (Liberty Telecommunications Holdings Inc.).

San Miguel has scheduled the execution of the special block sale of the subject common shares on the local bourse on Oct. 9. 

Unlike common stocks, preferred shares have a higher claim on the assets and earnings of the company. However, they don’t have voting rights.

San Miguel has the option to redeem the preferred shares on the third year of the issue.