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The ‘sister teams’ of PBA

SAN Miguel Corp. (SMC) is not the sister team of Ginebra San Miguel Inc. (GSMI) when it comes to corporate layers of ownerships.

It indirectly owns Ginebra San Miguel because GSMI’s majority stockholder is an SMC subsidiary, aside from the fact that SMC directly holds certain block of GSMI preferred shares.

Here is Due Diligencer’s brief analysis: SMC is the indirect parent of Ginebra San Miguel because it owns 5.665 billion common shares or 95.87 percent of 5.909 billion outstanding common shares in San Miguel Food and Beverage Inc. (SMFBI), according to a public ownership report (POR).

(Note. SMC’s ownership of 5,665,341,800 SMFBI common shares divided by 5,909,220,090 outstanding

SMFBI common shares equals 95.8729 percent or 95.873 percent.)

With SMC in control of 5.665 billion SMFBI common shares, the public stockholders are left with 243.409 million SMFBI common shares or 4.12 percent.

In turn, SMFBI holds 216.972 million GSMI common shares or 67.992 percent of 319.115 million outstanding GSMI common shares, according to a 2018 general information sheet (GIS) posted on the website of the Philippine Stock Exchange (PSE).

PCD Nominee Corp. holds 53.863 million GSMI common shares or 16.879 percent. It acts only as record stockholder for beneficial stockholders of listed companies. This means the beneficial owners of stocks lodged with PCD Nominee exercise the right to vote these common shares.

Ownership profile

In its latest POR as of June 30, 2018, Ginebra San Miguel’s outstanding common shares dropped to 286.328 million from 319.115 million that it reported in a GIS for 2018. This is because of the exclusion from the computation of 32.787 million GSMI preferred shares held by SMC because a POR filing doesn’t include preferred shares in the computation of public ownership.

In addition, Ginebra San Miguel had piled up 59.297 million treasury shares as of June 30, 2018. In a quarterly financial filing, it placed the value of said treasury shares at P2.67 billion.

As a result of the exclusion of 32.787 million preferred shares from outstanding GSMI common shares, SMFBI’s ownership of GSMI common shares increased to 75.777 percent of 286.328 million outstanding GSMI common shares from 67.992 of 319.115 million outstanding GSMI common shares reported in the GIS.

For the information of GSMI’s public stockholders, SMC-owned preferred shares are voting. This means SMC and SMFBI combined for 249.759 million voting shares or 78.266 percent of 319.115 million outstanding voting shares.

In a POR, Ginebra San Miguel attributed to its public stockholders the ownership of 58.919 million GSMI common shares or 20.577 percent of 286.328 million outstanding GSMI common shares.

Due Diligencer’s take

Ginebra San Miguel and SMC are member teams of the Philippine Basketball Association (PBA). For sports enthusiasts, they’re sister companies. To them, it’s not important anymore which among SMC’s subsidiaries own GSMI as long as their respective players show their fans they’re in the PBA to give them their money’s worth.

A unit or subsidiary of SMC or of any other listed company shouldn’t be a problem. If SMC, thru San Miguel Food and Beverage, is the indirect owner of Ginebra San Miguel, so be it.

In sports, let the two companies remain “sister teams”. Whether they’re Kings or Beermen, nothing is more important to their fans than their brands of play.

In sports, the parent has nothing to do with the son. Ginebra San Miguel may have succeeded in dethroning its indirect parent company as PBA champion but the fight for supremacy between them would and should stay for the sake of the more avid fans of basketball.

Nothing is wrong if the sports beat reporter treats or writes about the two PBA members as “sister teams”. The same holds true for the business section of The Manila Times where terminologies differ from those used in sports.

In business, GSMI will remain an SMC’s indirect subsidiary because San Miguel Food happens to be an SMC unit.

By the way, how come men play basketball for the two “sisters”? Just asking.


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