First Pacific ends San Mig stake talks
First Pacific Co says it has pulled out of negotiations to take a larger stake in Philippine brewing and food group San Miguel Corp.
First Pacific last month said it had spent less than $542.3 million taking a 2 per cent holding in San Miguel and was looking to increase that holding through acquisition of another strategic stake.
'Discussions with various parties regarding the acquisition of a substantial strategic stake in San Miguel Corp have ceased,' First Pacific said.
'The company has concluded that satisfactory agreement among the parties cannot now be reached.' First Pacific - controlled by Indonesia's Salim Group - said it intended to hold on to its present stake, believing it to be a sound investment.
Analysts were doubtful over the merits of First Pacific taking a larger or controlling stake in San Miguel, because it would leave First Pacific open to the potentially risky world of Philippine politics.
It was widely believed that First Pacific was negotiating with the Philippine Government to buy assets at present held by the Presidential Commission on Good Government.
This body controls stock sequestered from former associates of late dictator Ferdinand Marcos. It holds 47 per cent of San Miguel's shares, 20 per cent of which are said to belong to Eduardo Cojuangco, a close associate of Marcos.
Reports from Manila suggested it was these shares that First Pacific was negotiating to buy, although this was never confirmed by the company or the government.
If the deal had gone through, the scene was set for what could have been a bitter battle between First Pacific and the founding Soriano family, which, despite holding only 2 per cent of the stock, still has operational control the company.
