SAN Miguel Corp. Retirement Plan (SMCRP) is probably the biggest single investor that ordinary investors who trade on shares in companies listed on the Philippine Stock Exchange (PSE) have to compete with. If this writer’s computations are correct, SMCRP now owns P40.381 billion worth of SMC shares are assumed at a price of P45 each based on last week’s market.

But competing with SMCRP may not be that easy; the pension fund has too much money to play with as it has the backing of SMC itself in buying out the company’s big stockholders. The biggest seller to yield to SMCRP’s lure was SM Investments Corp., which sold last year 339.35 million SMC shares at P80 each, for total proceeds of P27.148 billion. With this latest acquisition, SMCRP’s ownership may reach the equivalent of 28.43 percent of SMC’s 3.156 billion outstanding shares.

The percentage here— 897.373 million shares divided by 3.156 billion outstanding shares—resulted from a series of computations that assumed that GSIS has also sold its 1.80 million SMC shares consisting of P1.464 million A shares and 358,900 B shares as of December 31, 2007. Included in adding the fund’s holdings in SMC were 409.088 million SMC A shares and 147.112 million SMC B shares, which totaled 556.20 million shares.

SMC said in a filing posted on the web site of the PSE that SMRCP owned these shares as of end-February 2008. The total of 897.373 million shares also included 339.35 shares it bought from the SM group controlled by businessman Henry Sy Sr. and 1.82 million A and B shares held by the Government Service Insurance System (GSIS). GSIS, along with the Social Security System (SSS), was reported last year to have sold their SMC shares to SMCRP. From the disclosures, it appeared the fund had already paid SSS but not GSIS.

Not covered. As stockholders are not covered by the full disclosure rule as far as the Securities and Exchange Commission is concerned. With this policy, the public investors don’t have a way of finding out if SMCRP has, in fact, bought out GSIS, which is still listed as an SMC stockholder as of end-2007. As far as SSS is concerned, it has disappeared from the same list. Whether or not these ownership assumptions are true will be known only when SMC files its annual report covering its financial performance in 2007.

If San Miguel is not covered by the rule, then there must be a way to know the facts behind SMCRP’s acquisition of SMC shares owned by the Sy family. And the only way is to search among the PSE files. The search showed the sale by the Sy family of SMC shares is covered by “stock purchase agreement wherein SMIC agreed to sell through the PSE its 339.3 million SMC common shares to SMCRP at an agreed price, payable on or before October 31, 2008, extendable for additional two months up to December 31, 2008.” The agreement will be submitted for approval by SMIC’s stockholders in their annual meeting on April 25, 2008. This means while SMIC has yet to collect the proceeds from the sale, it retains the ownership of the shares which were the subject of the purchase agreement.

Here is the best part of the deal: “Should any part of the total consideration remain unpaid as of December 31, 2008, any payments made by SMCRP, including any stock dividends accruing to SMCRP, shall be forfeited in favor of SMIC as liquidated damages for the failure of SMCRP to consummate the contemplated transaction.”

It is not known how much SMCRP paid as initial payment for a deal worth P27.148 billion and whether the amount came from P31.742 billion which SMC advanced to it to finance the pension plan’s market investments.

With its entire holdings, SMCRP may elect four seats in SMC’s 15-man board. But the question is: were SMC shares good investments? At P45 per share, the SMIC-owned SMC shares the fund bought last year had a market value of P15.27 billion against acquisition cost of P27.148 billion. This means SMCRP may not be incurring a paper loss of P15.243 billion had it fully paid the shares.

IPO watch. Here is an initial public offering that will take place in the second quarter that got into a good start by attracting big players. AO Capital Partners Ltd. made close to $1.5 million pre-IPO investment in Cebu-based Morp Labs, a leading enabler of software service that leverages virtual infrastructure and open-source technologies. “This investment also represents AO Capital’s commitment to technology entrepreneurship value creation in the Philippines, said Martin Lichauco, AO Capital managing director. Lichauco has so much confidence in Morp Labs and its founder Winston Damarillo, who put up Gluecode Software, a company bought by IBM in 2005.

GLOBE Telecom said it was not violating any rule in undertaking the preparatory civil works for the $40-million cable landing station in Cagayan.

Belle net income soars to P332M

LISTED property firm Belle Corp. posted a net income of P331.7 million in 2007 from P152.3 million the previous year.

THE biggest high-end residential development projects in Cebu, by Landco and Ayala Land, reported phenomenal uptake rates and interest not only from local buyers but from overseas-based investors as well.

LISTED media giant GMA Network Inc. is mulling over the sale of its 49-percent stake in a real-estate company, noting that it is not part of its core business.

SAN Miguel Corp. Retirement Plan (SMCRP) is probably the biggest single investor that ordinary investors who trade on shares in companies listed on the Philippine Stock Exchange (PSE) have to compete with. If this writer’s computations are correct, SMCRP now owns P40.381 billion worth of SMC shares are assumed at a price of P45 each based on last week’s market.