Max’s Group folds into Pancake House

MANILA, Philippines - The Max’s Group of Companies will be folded into listed Pancake House Inc. in a P4-billion transaction that would cement the latter’s  position as the largest casual dining chain in the Philippines.

In a regulatory filing, Pancake House said its board of directors authorized the acquisition of all the issued and outstanding shares of 20 companies that make up the Max’s Group of Companies.

“This transaction leverages the operational synergies of both groups, creating a bigger, more integrated and efficient organization,” Pancake House said.

To pay for the acquisition, the listed restaurant chain said it will issue 270.2 million new Pancake House shares at P15 apiece to Max’s Group of Companies.

The new shares will be sourced from the increase in authorized capital stock of Pancake House to P1.4 billion from the current P400 million. The Securities and Exchange Commission will have to approve the plan to increase the listed firm’s authorized capital stock.

The 20 companies to be acquired are: Ad Circles Inc., Alpha Max Group Ltd., Chickens R Us Inc., Fresh Healthy Juice Boosters Inc., Max’s (Ermita) Inc., Max’s Baclaran Inc., Max’s Bakeshop Inc., Max’s Circle Inc., Max’s Express Restaurants Inc., Max’s Food Services Inc., Max’s Franchising Inc., Max’s Kitchen Inc., Max’s Makati Inc., Max’s SM Marikina Inc., MGOC Holdings Inc., No Bia Inc., RooM Ventures Corp., Square Top Inc., The Real American Doughnut Co. Inc. and Trota Gimenez Realty Corp.

Pancake House stocks were suspended from trading yesterday due to the transaction.

In December, Pancake House Holdings Inc. sold all its Pancake House shares to Max’s Group for P2.98 billion. Max’s Group then conducted a tender offer, allowing it to secure 89 percent of Pancake House.

The acquisition allowed Max’s Group to increase its brands to 14, adding the likes of Pancake House, Teriyaki Boy, Dencio’s, Yellow Cab and Kabisera to its fold. Prior to the deal, Max’s Group carried Max’s Restaurants, Max’s Corner Bakery, Krispy Kreme and Jamba Juice.

During Pancake House’s stockholders meeting last month, Robert Trota, president of Max’s and Pancake House Group, said there were no plans to incorporate Max’s Restaurant in Pancake House.

Trota had said the restaurant group expects major brands Pancake House and Yellow Cab “to continue to perform consistently, and we intend to nurture other brands in the portfolio so they can catch up.”

As of end-March, the listed firm had 310 co-owned and franchised stores: 114 Pancake House, 15 Dencio’s Bar and Grill, 37 Teriyaki Boy, 16 Sizzlin’ Pepper Steak, 14 Le Coeur de France, two Chicken Rice Shop, 109 Yellow Cab and three Maple.

In the first quarter, net income attributable to equity holders of Pancake House slipped by nearly a quarter to P31.75 million from P41.56 million a year ago due to costlier operations and more expensive raw materials. Consolidated revenues rose 4.81 percent to P926.73 million from P884.19 million.