South Korea’s Lotte Chilsung Beverage offered to acquire shares that it does not own in soft drinks maker Pepsi-Cola Products Philippines Inc., a deal valued up to P4.2 billion.
PCPPI said in a disclosure to the stock exchange Lotte Chilsung wanted to buy 2.134 billion common shares, representing 57.78 percent of the company’s total issued outstanding capital stock at a tender offer price of P1.95 apiece.
The price represents a 39.3-percent premium over the stock’s closing price of P1.40 per share on Tuesday.
Trading of PCPPI shares was halted to give market investors time to evaluate the new development.
In 2010, Lotte Chilsung, one of the biggest beverage companies in South Korea, acquired a significant stake in PCPPI after purchasing the combined stakes of Guoco Inc., Hongway and other minority shareholders.
Lotte Chilsung holds an approximately 38.8-percent stake in PCPPI while US beverage giant PepsiCo Inc. owns 25 percent.
Assuming Lotte Chilsung acquires all 2.134 billion shares in PCPPI, the public float of the the bottling firm will drop to less than 10 percent, which could subject the company for a possible delisting.
All listed companies are required to comply with the 10-percent minimum public float.
Meanwhile, PCPPI said it would continue to strengthen its core business lines in the beverage sector after the company formally discontinued manufacturing locally-made snacks under the trademark Cheetos.
“Successfully reaching this agreement allows PCPPI to advance and renew its focus and commitment to a more sustainable future, while optimizing and strengthening the production and distribution of carbonated and non-carbonated beverages to millions nationwide,” PCPPI said.
PCPPI said PepsiCo would continue to import and sell Cheetos in the Philippines, along with other brands of snacks.
PCPPI in 2015 said it would produce PepsiCo’s world-famous snacks brands locally, in line with the company’s thrust of becoming a premier food and beverage company in the Philippines.
PCPPI then constructed a P650-million snacks plant, designed to be a world-class foods manufacturing facility, on a 9,800-square-meter lot in Cabuyao, Laguna.