GROCERIES operator Puregold Price Club, Inc. said on Monday it had secured the approval of the Securities and Exchange Commission on its planned merger with three local retail firms.
It said the SEC approved on Friday Puregold’s planned merger with Daily Commodities, Inc., First Lane Super Traders Co. Inc., and Goldtempo Company Inc., which owns Budgetlane, Budgetlane’s Superpalengke, Budgetlane Supermart, and Budgetlane Sulitmarket.
Upon execution of the merger, 17 Budgetlane stores are to be converted to Puregold stores.
The stores are located mostly in Cabanatuan City in Nueva Ecija as well as in the provinces of Rizal, Bulacan, and Aurora.
Under the deal, Puregold shall pay the absorbed firms’ shareholders a total of P14.55 million for 14.55 million common shares valued at P1 apiece.
“The Company intends to consolidate all stores catering to the same market group into one Company,” Puregold said in a disclosure to the stock exchange.
“The Company expects better inventory management, efficient cash management and simplified reporting to government agencies as a result of this merger,” it added.
The merger’s transaction cost was based on the absorbed firm’s net book value against the closing price of Puregold as of end-December 2016.
Following the deal, Puregold said it will issue new shares as consideration of the merger.
Puregold’s outstanding shares to date stand at 2.76 billion shares. After the merger, it will effectively increase to 2.78 billion common shares.
As of end-September 2017, the Puregold group operated a total of 352 stores nationwide. These include 291 Puregold stores, 13 S&R membership shopping warehouses, and 31 S&R New York Style QSRs (quick service restaurants), nine NE Bodega Supermarkets and eight Budgetlane Supermarkets.