Petron Gains 11% on Speculation San Miguel Will Take Control

By Francisco Alcuaz Jr.
Dec. 15 (Bloomberg) -- Petron Corp. rose 11 percent to a 16-year high on speculation San Miguel Corp. will buy the refiner’s majority owner, helping Petron with sales and funding.
Petron, the larger of the Philippines’ two refiners, rose 1.40 pesos to 14.22 pesos at the noon close in Manila as the benchmark stock index declined 1.4 percent. It’s gained 168 percent this year, compared with 34 percent for the benchmark index. Petron isn’t a member of the index.
Today is the deadline for San Miguel to exercise its option to buy 60 percent of SEA Refinery Corp., which owns 50.1 percent of Petron, according to Bloomberg data. San Miguel, the nation’s biggest food and beverage company, already owned 38 percent of Petron, according to its third-quarter report.
The shares may have gained “in anticipation of San Miguel’s exercise of its right,” said Jojo Gonzales, vice president at Philippine Equity Partners Inc. in Manila. “There’s some amount of synergy with San Miguel, which acquired a diesel power plant. San Miguel is moving to energy.”
San Miguel in 2009 bought the government’s 620-megawatt plant in Limay, Bataan province, the same municipality where Petron’s refinery is located. San Miguel has bought other state power assets as part of its plan to invest in faster-growing businesses.
“Petron has fairly significant expansion plans, like petrochemicals,” Gonzales said. “It needs a moneyed parent, which San Miguel is.”
Expansion
Petron plans to spend $2 billion for expansion, Ramon Ang, chairman of the refiner and president of the food and beverage company, said Dec. 8.
The refiner may have also gained because there’s speculation that Petron will acquire an “overseas corporation” and that it’s looking at “existing, profitable companies” that will boost earnings, said Nestor Aguila, president of DA Market Securities Inc. in Manila.
Neither San Miguel nor Petron have announced whether the food and beverage company exercised its option. Petron President Eric Recto declined to comment. San Miguel President Ramon Ang didn’t reply to a mobile phone text message.
--Editors: Reinie Booysen

Petron shares soar after SMC makes tender offer for stocks held by public

By JAMES A. LOYOLA
April 26, 2010, 5:05pm
San Miguel Corporation is making a tender offer for about P5.78 billion worth of the shares of Petron Corporation after it has decided to exercise an option to acquire 40 percent of the majority owner of the oil giant for P12.88 billion.
In a disclosure to the Philippine Stock Exchange Monday, the diversified conglomerate said that its executive committee has approved the exercise of the option on or before April 30, 2010.
The news sent Petron's shares soaring to a three-year high. Petron, which has free float of just 9.4 percent, closed up 10 percent at P6.60 in heavy volume, and was the sixth most actively traded stock.
SMC will buy 40 percent of the outstanding common shares of Sea Refinery Corporation in accordance with the terms and conditions of the Option Agreement, dated December 24, 2008, executed by SMC and Ashmore Group’s SEA Refinery Holdings, B.V.
SMC spokesperson said: “We’re still buying entire 100 percent of SEA refinery, this is just the first phase.”
SMC had earlier announced that it had signed an option agreement to buy 100 percent of the firm that owns 50.1 percent of Petron.
SMC said it will now initiate a tender offer for the common shares of Petron held by the public, on the appropriate date, in accordance with the mandatory requirements of the Securities Regulation Code, at an offer price of P6.85 per share.
Since the Ashmore group now owns a little over 90 percent of Petron, acquired from Saudi Aramco and the government, about 9 percent of Petron is left in the hands of the public. Petron has 9.38 billion outstanding shares.
SMC had earlier said it needed P32.21 billion to buy the 50.1 percent interest in Petron held by SEA Refinery Corporation of the Ashmore group through a two-year option agreement.
It said it entered into an option agreement with Ashmore’s Sea Refinery under which SEA BV granted SMC an option to acquire and purchase from SEA BV up to 100 percent of its interests in SEA Refinery Corporation (SRC).
The option may be exercised by SMC within a period of two years from December 24, 2008.