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Emperador Climbs After Deal With Singapore’s GIC

Published on Nov 7 2014 6:22 AM in Drinks

Emperador Climbs After Deal With Singapore’s GIC

Emperador Inc. rose the most in more than two months in Manila trading after Singapore’s sovereign wealth fund agreed to buy a stake in the brandy maker.

Emperador rose 3.4 per cent to 11.02 pesos as of 1:36 pm, the biggest intraday gain since 27 August. Alliance Global Group Inc., its parent, rose 0.4 per cent, while the Philippine Stock Exchange Index fell 0.2 per cent.

The transaction will strengthen Emperador’s capital position and allow it to expand domestically and overseas, the Manila-based company said in a filing today.

“The partnership enhances AGI’s track record of growing companies into market leaders,” billionaire Chairman Andrew Tan said in the statement, referring to Alliance Global.

GIC Pte. agreed to buy 1.12 billion Emperador shares at 11 pesos each for a total of 12.3 billion pesos ($273 million), the Philippine company said in the filing. That’s equivalent to a 6.95 per cent stake. GIC also will buy 5.28 billion pesos of equity-linked securities, which will boost its stake to 9.64 per cent if they are converted to common shares.

The Singapore wealth fund has an option to invest another 4.4 billion pesos over 13 months to increase its stake to 11.76 per cent, Emperador said. The agreement is expected to be completed within this month, according to the company.

Diageo Plc’s United Spirits Ltd. unit agreed in May to sell its Whyte & Mackay spirits business to Emperador for £430 million ($681 million) including the assumption of debt.

Emperador sold about 33 million cases of brandy last year, or almost 50 per cent of the total spirits volume in the Philippines, according to the statement. The company’s most successful product is Emperador Light, introduced in 2010.

Bloomberg News, edited by Hospitality Ireland

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