The listed Doubledragon Corp. (DD) will acquire shares in listed consumer and wholesale retailer Merrymart Consumer Corp. with P12.8 billion shares.
DD said in a regulatory filing Wednesday that it will buy 2.66 billion Centavos common stock at 48 Centavos per share.
Prices are based on the 30-day sales weighted average price (VWAP) of Merrymart stock. Half of the transaction will be paid with DD stock, while the remaining half of the cash will be made at $637 million p637 million.
Merrymart is chaired by Edgar “Instap” J. Sia II, while DD is a joint venture between Mr. Sia and Tony Tan Caktiong, founder and chairman of Jollibee Group.
The transaction also requires DD to conduct mandatory bidding for the remaining shareholders with the remaining shareholders and Merrymart shares held by the outstanding capital stocks under final regulatory approval.
“Based on the 30-day VWAP pricing, the deal translates Merrymart's total stock valuation to about 3.65 billion pesos,” DD said.
DD said the acquisition of shares in Merrymart is in line with the company's plan to transfer to an investment holding company.
“Given the Merrymart Group’s various formats in the retail and wholesale sectors and its pharmacy subsidiaries, which are the main pharmacies of Quezon-Luzon and Zamboanga-Mindanao, and its main grocery business in Capiz Province, the Merrymart Group is expected to create long-term value and synergistic DD for DD.”
In April 2021, DD revised its company's articles of association, which transformed its main purpose into an investment holding company for real estate developers.
Merrymart generates more than P7 billion in recurring revenue each year from basic retail such as grocery stores and pharmacies and other consumer-related businesses. It has 135 branches nationwide.
DD said the acquisition will also support its target of reaching pesos 500 billion by 2035.
DD shares rose 17.20% on Wednesday, up 17.45 p9.88 per share, while Merrymart shares soared 25% or 12 Centavos, respectively, to 60 Centavos. – Revin Mikhael D. Ochave
