Lucio Co gains ₧1.5B from sale of stake in Alfonso brandy maker

Businessman Lucio Co made a P1.5-billion windfall from the sale of his own stake in Alfonso brandy maker, Williams and Humbert SA.

Co, known for his popular grocery chain Puregold, has sold his stake in the Spanish brandy maker to his publicly-listed liquor distribution company, The Keepers Holdings Inc.

According to Abacus Securities Corp.’s research note “Short Takes,” the amount of the transaction is more than double the 25 million euros that Co paid when he bought the 30 percent stake from the original owners of the Spanish firm in 2018.

“We had expected a lower price for the 50 percent stake. First, it exceeds the net proceeds from the secondary offering last year but, more importantly, it implies a much higher valuation for W&H (EUR177.5 million on a 100 percent basis) compared to when Mr. Co himself took a 30 percent stake in 2018 for only EUR25 million,” the broker said.

In a disclosure to the Philippine Stock Exchange last week, The Keepers said it has executed share purchase agreements covering the acquisition of 50 percent of Bodegas Williams and Humbert for P5 billion.

The 30 percent were sold by Co and his family’s real estate firm VFC Land Resources Inc. while the 20 percent were sold by the Medina family which is the original shareholder of the company.

The 88.75 million euro acquisition is based on the independent valuation undertaken by PricewaterhouseCoopers.

The broker said the brandy maker’s earnings last year is not much different from the level in 2018 so the higher price could be due to the premium for a larger stake or better prospects for next year.

Abacus said The Keepers’ bottom line could get a boost of about P400 million per year, about 20 percent of its 2022 earnings, because of the acquisition. It gave a “buy” rating on its shares.

The Keepers, the largest imported liquor distribution in the Philippines, said the acquisition will enhance the competitive position of the group and strengthen its hold and secure the company’s supply line of its flagship brand and category, Alfonso brandy, which corners a huge chunk of its sales.

The investment will also transform the company’s business model from a pure trading to a manufacturing and distribution firm and provide an opening into markets outside the Philippines.

The equity investment will also be bottom line accretive from its share in the future net income of Bodegas Williams and Humbert.

Bodegas Williams and Humbert is a respected family-owned winery in Jerez de la Frontera, Spain, founded 140 years ago.

Image credits: