GOKONGWEI-owned Robinsons Retail Holdings Inc. (RRHI) is acquiring the Rustan’s grocery brands through an P18-billion share-swap agreement with pan-Asian retailer Dairy Farm International Holdings Limited.
In a disclosure to the Philippine Stock Exchange (PSE) late Friday afternoon, March 23, RRHI said it has agreed to partner with Dairy Farm “to build a leading food retail business.”
The deal covers the Rustan’s food retail brands Marketplace by Rustan’s, Rustan’s Supermarket, Shopwise Hypermarket, Shopwise Express and Wellcome.
Under the share-swap agreement, the Gokongwei-led company will acquire the 100-percent stake of Dairy Farm subsidiary Mulgrave Corporation BV in Rustan Supercenters Inc., which is valued at P18 billion.
Mulgrave, in turn, will own 18.25 percent of RRHI after a secondary sale tranche in which Gokongwei family members will sell some of their shares, resulting in the family owning 51 percent of RRHI.
Dairy Farm, in a statement, said it will exchange its interest in Rustan's for RRHI shares representing 12.15 percent of the Gokongwei firm's enlarged share capital at an agreed price per share of P94 for a total value of $346 million (roughly P17.9 billion at current exchange rate).
Dairy Farm will "acquire a further 6.1-percent interest of the enlarged share capital from the existing controlling shareholders at a cost of $174 million," or P9 billion.
"This will give Dairy Farm a total holding of some 18.25 percent. The Gokongwei family, being the controlling shareholders, will continue to hold a 51-percent interest in RRHI after completion of these transactions," Dairy Farm said.
The transaction will be presented for approval to RRHI’s stockholders during its annual meeting on May 28, 2018. It will also be submitted for approval to the Philippine Competition Commission and the Securities and Exchange Commission.
“Leveraging the combined strengths of RRHI and RSCI (Rustan’s) will lead to benefits to customers in terms of even better service, quality and value,” RRHI said in its disclosure.
Dairy Farm, a unit of Jardine Matheson Ltd., first acquired a 50-percent stake in Rustan’s Supercenters in 2012, increasing this to 66 percent a couple of years later and further to 100 percent in July 2017.
Dairy Farm also acquired 49 percent of Cebu-based Rose Pharmacy Inc., with the Lim family retaining a 51-percent stake, in November 2014. It is also reportedly set to take control of Rose Pharmacy as it increases its shareholdings to 51 percent.
As of end-2017, Dairy Farm operates over 7,100 outlets and employed some 200,000 people. It had total annual sales in 2017 exceeding US$21 billion.
Aside from Robinsons Department Store and Supermarket, Robinsons Retail brands include Topshop, Dorothy Perkins. Daiso, The Generics Pharmacy, Handyman and Ministop, among others. (Marites Villamor-Ilano/SunStar Philippines)