Word on the street is that ownership—or at least control—of this high-end department store chain has finally changed from its founding family to a Hong Kong-based conglomerate.
Biz Buzz understands that the groundwork for the foreign buyout was actually laid down a few years ago when the department store chain entered into a partnership with this conglomerate (Clue: Its headquarters in Hong Kong’s Central district sports a distinct window design).
But sometime late last year, the family decided to sell a controlling stake in the holding company to the foreign partner for reasons yet unknown. But given the upscale market positioning of the firm, we’re sure the transaction price would have come at a nice premium.
Going forward, it should be interesting to see whether the new controlling shareholders take the brand to a new direction or forge ahead with its current path. Abangan. —DAXIM L. LUCAS
High stakes battle
The Senate resumes its sessions today to deliberate on pending legislation and, from all indications, the debate to be watched is the one on the taxation scheme for cigarettes—a high stakes battle for industry dominance between Philip Morris Fortune Tobacco Co. (PMFTC) and rival local manufacturer Mighty Corp.
In recent weeks, both giant firms have rolled out their arguments before the public.
PMFTC backed the transition starting Jan. 1 this year from the two-tier tax scheme for cigarettes based on their pricing to a unitary scheme where a single tax rate will apply to all, regardless of whether these are premium brands or more affordable tobacco products aimed at the mass market.
Mighty, on the other hand, is backing legislation that would revert to the two-tier scheme, although the tax for both tiers would be increased to raise more revenues for the government.
Mighty has disputed the argument that the two-tier tax scheme had been bad for tobacco farmers as evidenced by data from the National Tobacco Administration that showed a decline in production volume and value in the years that the two-tier system was in place.
“It’s not because of the two-tier system,” said one Mighty official, who explained that the decline in production was the industry’s natural reaction to farmers producing more than what the market could absorb in recent years. “It’s simply an issue of overproduction from the previous year.”
The Bulacan-based producer of mass market cigarettes claimed that the current two-tier scheme was regressive because there was practically no gap between the tax rates for low and high priced products (hence the company’s backing for higher tax rates for more expensive products).
This was not the case, according to PMFTC, whose more upscale brands contribute a significant amount of revenues for the multinational firm. It has pointed out that a unitary tax would level the playing field in the industry.
And just as Mighty has the backing of its own stable of congressmen, economists and key industry people, Biz Buzz learned that PMFTC has also received the support of some tobacco farmers (one group, in fact, is publishing an open letter today to oppose the increase in “sin taxes” as proposed by the Mighty-backed House Bill 4144).
So with both groups parading before lawmakers their own supporting statistics and influential backers, the question is: Who’s argument will win the day? Or is some kind of compromise possible? Watch this space, folks. —DAXIM L. LUCAS
PSE’s BGC kinks
After more than a decade of delays, renegotiation and recalibration, the Philippine Stock Exchange is ready to move to its new home—one with a unified trading floor, finally—in Bonifacio Global City. The new PSE office building has been completed and the fit-out being undertaken, possibly ready for occupancy by the third quarter of this year.
More than 80 (or at least 60 percent of 132 trading participants) reserved office space in the new PSE corporate headquarters, which will have a smaller trading floor than what either Tektite or Ayala trading floor now has. The PSE itself will occupy 6,500 square meters of office space while trading participants who have reserved office space will take up about 18,000 sq m.
There are still key issues, however, that the PSE still has to resolve. There is grumbling among brokers on what seemed to be an “unusual” way of pricing the units allotted to them. The first unit that each trading participant reserved was priced “at cost” to brokers at P125,000 a square meter and the second unit at “market price” of P200,000/sq m. The third and subsequent ones were sold again “at cost” at P125,000/sq m.
Those who didn’t know that subsequent units will be offered at a lower cost—and probably would have reserved a bigger space if they had known—were of course, not happy.
It would have been a nonissue if everyone knew about the pricing formula for the subsequent units, stock market sources said. In any case, those who reserved the most units are seen benefiting the most from a much cheaper blended cost.
Thus, the pricing renegotiation and recalibration continues, hopefully toward a peaceful resolution. We’re keeping our fingers crossed. —DORIS DUMLAO-ABADILLA
Sky Range anniversary
The country’s most modern— and arguably, the most upscale and most expensive—gun club is turning a year old this week and, to celebrate its first year in operation, its top honchos are organizing … you guessed it … a shooting competition.
We are, of course, talking about the Sky Range Shooting Club at the Solaire Resort and Casino complex, which boasts of 20 shooting bays, 15 of which are for pistol shooting of up to 25 meters and five lanes for rifle shooting of up to 50 meters. Did we mention that it has the only Philippine National Police-accredited indoor rifle range in the country? Yes, sir. Businessman Enrique Razon Jr. spared no expense with this one.
Members can try out a mind-boggling array of company owned pistols and rifles, the kinds of which one only sees in the movies. But for the Jan. 21 anniversary shooting competition, participants need not worry about bringing their own exotic firearms as the contest will be held exclusively using “house guns” in the form of the popular Glock 17 pistol.
Participants need not worry about Sky Range’s P100,000 annual membership fee, too. The entrance fee for the anniversary event is pegged at only P5,000. And the winner of the three-course shooting competition wins, fittingly, a brand new pistol.
Incidentally, the event will also mark a leadership transition for Sky Range. It’s founding president, Gerry de Belen, is leaving for a post in the Manila Economic and Cultural Office, the Philippine’s de facto embassy in Taipei. Taking his place as the club’s president is Solaire’s head of security (and former Philippine National Police intelligence officer) Michael Ray Aquino. —DAXIM L. LUCAS
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