Eagle Cement shares jump as SMC sets acquisition

SHARES in Eagle Cement Corp. surged nearly 4% on Thursday as its majority shareholders agreed to sell their holdings to a unit of listed conglomerate San Miguel Corp. (SMC), prompting the buyer to set a mandatory tender offer of the cement maker’s shares.

In a disclosure, Eagle Cement said it was advised by its majority shareholders about the signing of a share purchase agreement on Oct. 5 for the sale of around 4.425 billion shares to San Miguel Equity Investments, Inc. for P22.02 apiece or a total of about P97.44 billion.

Separately, SMC told the stock exchange that as a result of the planned acquisition of 85.5% of Eagle Cement, the buyer is required to conduct a tender offer of the 11.5% shares held by the target company’s minority shareholders.

“The acquisition of [Eagle Cement] offers a complementary approach to the current investment strategy of SMC in the cement industry, will increase its foothold in the cement business and provide the opportunity to implement its plan to expand its cement business,” SMC said.

The selling shareholders are Far East Holdings, Inc., SMC Vice-Chairman and Eagle Cement Chairman Ramon S. Ang, John Paul L. Ang, and Monica L. Ang.

SMC said the acquisition of the Eagle Cement shares will be paid in cash. It added that the “basis for the negotiation and determination of the sale price was the valuation undertaken by an independent firm using global valuation standards.”

SMC said the closing of the transaction is subject to approval by the Philippine Competition Commission (PCC). It intends to file a request for exemption with the Securities and Exchange Commission to allow the tender offer to start after the PCC approval.

On Tuesday, SMC said that a special board meeting on Oct. 4 authorized the acquisition of the controlling stake in Eagle Cement, which manufactures and distributes cement.

On the stock market on Thursday, SMC shares jumped by P2 or 2.02% to P101 apiece, while Eagle Cement shares climbed by 74 centavos or 3.99% to P19.30 each. — Justine Irish D. Tabile