Manila, May 12 - San Miguel Corp President Ramon Ang said the company would focus on the Philippine market for now after listing 5 percent of its flagship domestic brewery, which gained 6.25 percent on its stock market debut on Monday.
Shares of San Miguel Brewery closed at 8.50 pesos (20 U.S. cents) against an offer price of 8 pesos per share in an IPO that valued the company at around $2.9 billion.
Turbulent financial markets and investor complaints that the offer was too expensive had forced San Miguel to twice shrink the price range and halve the numbers of shares on offer to raise $147 million.
Southeast Asia's biggest food and drinks conglomerate is planning to list its packaging business and conduct a follow-on offer after consolidating its food assets under Pure Foods Corp in the first quarter of 2009, Ang said.
"We hope to sell at least 20 percent of our packaging group when we go public," Ang said in a rare media conference, adding San Miguel was willing to retain just 51 percent of the food group.
Ang said San Miguel wants to list all its operating companies to make them efficient and transparent.
San Miguel's first quarter-performance was strong, Ang said, adding there was double-digit earnings growth in the quarter over a year ago, when it posted net income of 4.33 billion pesos.
San Miguel remained open to new non-core business ventures domestically, shunning overseas purchases for now, but was waiting for stock prices to stabilise before aggressively going for an acquisition, Ang said.
"We are interested to look at anything that will give San Miguel a good return and that can give the company growth," he said.
"We will be concentrating our energies now in the Philippines because we believe there is opportunity now in this crisis.
"I think it has not yet bottomed. And we believe there is a long way to go and the valuation of most of these companies will still go down tremendously. I think it is not yet the time to go and grab something," Ang said.
Ang also said San Miguel was not in advanced talks on any acquisition, adding there were no interesting power assets up for sale after it failed to acquire a 25-year licence to operate the national power grid at an auction in December.
San Miguel Brewery, the group's crown jewel, opened at 8.30 pesos per share on its debut and at one point fell to 7.90 pesos.
The IPO price was at the bottom of an indicated 8-11 pesos price range. Sources said the overseas offer, about 70 percent of the total, was 1-½ times covered while the domestic issue was also oversubscribed.
The IPO price values San Miguel Brewery, the Philippines top beer producer, at 13.7 times forward earnings, still at a premium to the local market, which is trading around 10 times, but broadly in line with regional peers.
San Miguel Brewery, the only big listing scheduled for this year, contributes around 40 percent of group operating profit and posted a 37 percent increase in net profit in the first quarter to 2.5 billion pesos on net sales up 13 percent.
Japan's Kirin holds about 20 percent of San Miguel stock. ($ = 42.6 pesos)