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Gokongwei family buying 9% of Shakey’s for P1.25 billion

JE Holdings, a private investment company owned by the Gokongwei family, is acquiring a 9-percent stake in pizza chain Shakey’s Pizza Asia Ventures Inc. for P1.25 billion.

Shakey’s said in a disclosure to the stock exchange the entry of JE Holdings as a new strategic investor would enable the company to further strengthen its operations and support expansion plans amid the pandemic.

“I’ve always been a fan of the Shakey’s brand and look forward to working with both the Board and management to further the company’s growth and restart expansion plans in anticipation of the inevitable reopening of our economy. I strongly believe in the long-term prospects of the food service industry, against a backdrop of rising Filipino incomes, and I have confidence that Shakey’s will continue to be a leader in this space,” said Lance Gokongwei, chairman and president of JE Holdings.

JE Holdings will purchase Shakey’s shares at P8.20 apiece, representing a 10-percent premium over the company’s latest stock price and 14.6 percent higher than the latest 45-day volume weighted average.

“We look forward to the entry of the Gokongwei family, and we in management are grateful for their belief in our business and our brands,” Shakey’s president and chief executive Vicente Gregorio said.

“Despite the short-term challenges, we too remain optimistic about our long-term prospects and, as result, have begun investing again in our stores, our people and our various operating capabilities. We believe that we are in a relatively good position financially and, with the added benefit of a new strategic investor, we plan to make the most of both the fresh round of capital and the various synergies that come along with partnering with the Gokongwei group of companies,” he said.

Shakey’s reported a net income of P28.7 million in the first quarter, down 75 percent from P113.6 million in the same period last year.

First-quarter gross revenues were also down 30 percent to P1.28 billion from P1.83 billion a year ago.

“The ongoing COVID-19 crisis continues to weigh heavily on the restaurant industry, with many consumers challenged by the macroeconomic conditions and/or opting simply to stay home amidst the fear of contracting the virus. The latter part of this quarter also saw the re-imposition of stricter measures to curtail dine-in, disrupting the part of our business which was experiencing a relatively good trajectory before then,” Gregorio said.

Dine-in sales saw a sequential dip in the first three months because of the restaurant industry’s seasonality, alongside fears of a more contagious variant and stricter quarantine measures.

Delivery and carryout sales which now comprises majority of the business posted strong double-digit year-on-year growth.

The top shareholders of SPAVI are Century Pacific Group and the sovereign wealth fund of Singapore. Lance Gokongwei will be elected as a member of SPAVI’s nine-seat board of directors in July.

SPAVI chairman Christopher Po said he supports Lance’s election to the board as he brings with him a wealth of experience and a variety of perspectives stemming from his diversified set of business interests.

“While our current balance sheet remains healthy, I look forward to further strengthening our financial position, with the new capital giving us additional flexibility at a time when many organic and inorganic opportunities have started to open up. As we are now firmly on the path of recovery, our sights are set on growth and expansion, and I thank the Gokongwei family for their trust and confidence in our long-term plans,” Po said.

Topics: JE Holdings , Shakey’s Pizza Asia Ventures Inc. , Lance Gokongwei
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