San Miguel Corp. (SMC) imposed a trading halt on its shares a week early on Wednesday ahead of an $850-million (P36.7-billion) share and convertible bond sale later this month and amid news that the Supreme Court reaffirmed SMC chairman Eduardo Cojuangco Jr.’s ownership over a 20-percent stake in the conglomerate.

In a letter to the Philippine Stock Exchange, SMC requested that its shares, and those of its Series “1” preferred shares, be suspended from trading starting April 13 until May 4.

“A suspension of trading will deter any speculative transactions and allow the public the opportunity to carefully analyze and consider investing in the offer shares,” read a portion of SMC’s letter.

SMC announced on Monday that the trading halt will commence on April 20. The domestic portion of the multibillion-peso offer will run from April 25 to 29.

Market watchers were generally surprised by the move, with some saying the company should have given investors “fair warning.”

SMC shares have fallen almost 12 percent since announcing on Monday that it will raise less funds than what the market was expecting, giving rise to speculation that the company also cut the indicative pricing for the shares.

SMC shares surged 10 percent in two weeks prior to the announcement.

The final pricing for the shares is not expected until April 20.

“It was a surprise, but it is [management’s] call to protect the share price of the company,” Astro del Castillo, managing director of local stock brokerage First Grade Holdings Inc., said in a phone interview.

Del Castillo noted that news relating to Cojuangco’s stake may have also played a part in the decision to suspend trading, saying this could cause undue “influence” on the stock price.

The Presidential Commission on Good Government, which contested the legality of Cojuangco’s ownership, reportedly plans to appeal the Supreme Court ruling.    

Another analyst, who requested anonymity, said SMC’s sudden decision was “unfair” to investors.

“Nobody likes it when a stock is frozen. That’s the part that gets investors apprehensive,” the analyst said.

Part of the issue also stems from the limited information available on the equity and convertible debt offer, being held by SMC and its controlling shareholder Top Frontier Investments Holdings Inc.

The bonds will be denominated in dollars and will be convertible to SMC treasury shares. SMC will use its share of the proceeds to fund new investments in nonfood businesses like power, railways, mining and telecommunications while Top Frontier intends to pay off shareholder advances.

Top Frontier, which is also 49 percent held by SMC, is partly owned by former Trade minister Roberto Ongpin, considered an ally of SMC president Ramon S. Ang.

Ang had earlier indicated that SMC may sell up to 1-billion common shares priced from P200 to P250 each, which helped boost the company’s shares to a record high of P189.50 per share.

Meanwhile, President Aquino on Wednesday reserved comment on the Supreme Court ruling that upheld an earlier Sandiganbayan decision that the shares of Cojuangco, his uncle, in SMC are not part of coco levy funds.

Mr. Aquino told reporters in an ambush interview after an informal interaction with troops here that he would rather issue an official statement after he reads in full the High Court’s decision.

“It would be good if I read the decision of the Supreme Court in its entirety before I make a statement. For now, my only basis is the headline, but it does not contain the full decision,” he said,

For the same reason, he would not say whether he is disappointed with the decision or whether the ruling is considered as a setback to government efforts to recover ill-gotten wealth.

“I also want to read the dissenting opinion. I don’t want to respond to speculation. I have to study it first,” Mr. Aquino said.

Secretary Ramon Carandang of the Presidential Communications Development and Strategic Planning Office said that Malacañang would let the Solicitor General determine the next step to take, following the ruling.

“This was a process that began even before President Aquino came into power and it’s near completion now as he came into the presidency....So we would leave this matter first with the Solgen in terms of the steps to take, and the response,” Carandang said.

The Court had ruled that the Sandiganbayan’s order to lift the writs of sequestration over Cojuangco 20-percent share in SMC did not constitute grave abuse of discretion.

(With M. Gonzalez)