Well There Goes The Neighborhood

[Mike S]

I sure hate to hear this but I suppose everything must come to an end ......The Daily Tribune - Without Fear or Favor03/29/2012Puregold Price Club Inc. is set to fully acquire S&R membership shopping clubs in the Philippines through share swap with approximate equity value of P16.5 billion to be approved by the company stockholders on May 8.The firm disclosed that during a recent board meeting, the company board of directors approved the submission of a binding offer to acquire the 100 percent ownership of the equity of Kareila Management Corp.Kareila is a company wholly-owned by the Co Family, which owns and operates the S&R membership shopping clubs in the Philippines.Under the share swap, Puregold will be offering 450 shares for every outstanding Kareila share, which implies an equity value of approximately P16.5 billion for Kareila, based on the closing share price of P21.50 per share of Puregold March 26, 2012, the day prior to the approval of the transaction by the PGOLD board.If approved, Puregold will issue approximately 766 million new shares in PGOLD to the Co Family and post completion, the Co Family will own approximately 77 percent of outstanding shares in the company.Puregold president Leonardo Dayao said the acquisition of S&R represents an exciting milestone in Puregold’s history and brings significant long-term strategic benefits and an additional avenue of growth for the company.“With both the Puregold and S&R stores, the company will have a complete offering of hypermarkets, supermarkets, discount stores and now membership clubs, and will cover the entire spectrum of consumers in the Philippines,” he said.Dayao also said the acquisition of S&R brings it to the best position to capitalize on the growth of the middle and upper classes in the Philippines (A and B class consumers) and enables Puregold to expand its customer base, complementing its primarily mass market customers (C, D and E class consumers).He also noted that it paves way for potential synergies through an integration of the Puregold and S&R businesses.The S&R business was acquired by the Co Family in 2006 from a joint venture controlled by a US company PriceSmart. It was modeled after successful warehouse membership shopping chains in the US such as Costco.It currently operates six membership shopping stores in the Philippines with four stores in Metro Manila, one store in Cebu and the newest store in Pampanga which opened in November 2011.It offers its customers high quality international and local brand names for both personal and business needs, with a significant proportion of its sales derived from imported international brands.Included in its sales are both food and non-food including fresh food, personal care, household products and electrical appliances as well as specialty services including deli, foodservice automotive services.Based on the audited accounts of Kareila, S&R posted P6.6 billion revenues in 2011, a growth of 61 percent from P4.1 billion in 2010 while gross profit was at P1.2 billion, implying a gross margin of 18.3 percent, net income at P660 million, implying a net margin of 9.9 percent. Danessa O. Rivera

[SubicSteve]

Nothing good will come of this.

[FlyAway]

Dayao also said the acquisition of S&R brings it to the best position to capitalize on the growth of the middle and upper classes in the Philippines (A and B class consumers) and enables Puregold to expand its customer base, complementing its primarily mass market customers (C, D and E class consumers).

Here we call that a Monopoly?

[i am bob]

Hopefully they will keep the quality and availabity up in the S&R (in other words - as it is now) and bring up the PureGold a bit at the same time? :thumbsup: