News and Updates
Home » News and Updates
Alliance Global shares up 11% as trading resumes
By Zinnia B. Dela Peña
The Philippine Star Tuesday, June 19, 2007
Shares of Alliance Global Group Inc., the holding vehicle for all real estate, food and beverage interests of tycoon Andrew Tan, rose 11.3 percent yesterday as investors snapped up the company’s stocks on the resumption of its trade following its additional share offering that generated proceeds of $447 million.
AGI shares closed at P6.40 compared with its offer price of P5.75 per share.
“We’re extremely happy with the results. The timing is impeccable. Investors’ sentiment is very positive,” said AGI president Kingson Sian in press briefing following the listing of the additional AGI shares on the Philippine Stock Exchange.
Lead underwriter UBS AG’s chief representative, Lauro Baja III, said AGI is the country’s largest follow-on offering to date, attracting close to $2 billion worth of foreign institutional orders or more than five times oversubscribed.
More than 100 investor groups participated in the offering, 37 percent of whom were from the United States, 32 percent from Europe, and 31 percent from Asia.
“So you see the high demand from the US which is always a good sign. These are all high-quality accounts, all long-term, fundamental-driven investors which is why it’s a blow-out success,” Baja said.
“It’s highly diversified and a well-sought after stock. I think investors are happy with management and the returns they got from Megaworld. This explains the strong stamp of approval they gave to AGI,” Baja added.
Last February, AGI acquired 25 percent interest in Megaworld Corp. and Emperador Distilers Inc. (EDI) from The Andresons Group Inc. EDI is the country’s leading brandy producer under the Emperador and Generoso labels.
There’s no word yet whether the company would exercise its greenshoe option. AGI has set aside up to 469.565 million shares to cover overallotments.
AGI is engaged in glass-container manufacturing, food and beverage business (manufacturing, trading and quick-service restaurant through McDonalds), and real estate (development of real estate and lease of properties). In the glass-container manufacturing business, the company produces flint glass bottles and jars based on customers’ specifications.
In the food and beverage business, AGI trades and distributes international brands. The subsidiaries operating in the United States handle the manufacture and international distribution of Pik-Nik shoestring potato snack brands.
The follow-on offering involved the sale of 1.8 billion primary shares and 1.33 billion secondary shares to both local and foreign investors.
UBS AG through UBS Investment Bank, CLSA Ltd. and Macquarie Securities were tapped as lead international underwriters and managers. BDO Capital & Investment Corp. was the domestic issue manager and lead underwriter.
About P10.3 billion in proceeds from the sale of primary shares will be used to fund AGI’s planned acquisition of new businesses and expansion of existing operations.
AGI is planning to spend P7 billion for the expansion of EDI, P1 billion for the creation of a new food and beverage product and another P1 billion for acquisitions in the food and drinks sector.
Sian said the company is engaged in preliminary talks with a number of food and beverage firms but declined to identify them pending completion of negotiations.
Another P1 billion will go to repayment of debt, amounting to P2.3 billion.
Sian said bulk of AGI’s net income, or between 40 percent and 45 percent ,will come from Megaworld while 20 percent, will come from EDI. Megaworld’s contribution, however, is expected to go down to 30 percent over time with the anticipated strong performance of EDI.
