July 01, 2014

PCKH to issue shares for deal with Max's Group of Companies

Pancake House (PCKH, Not Rated) disclosed to the Exchange that it was acquiring 100% of the issued and outstanding shares of the Max's Group of Companies for approximately P4.05b. As part of the deal, PCKH is increasing its authorized capital to P1.4b from P400m, and issuing P4.05b worth of stock to the existing shareholders of the Max's Group. The new shares will be priced at P15 if issued before PCKH's 100% stock dividend or P7.50 if issued after. Record date for the dividend has yet to be announced.

Our take.The transaction formalizes the previously-disclosed purchase of PCKH by the Max's Group, which is now folding in its other assets under the listed PCKH vehicle. With seven major restaurant chains already under its umbrella, PCKH's latest acquisition will make it one of the country's biggest restaurant groups. It remains to be seen, however, if the merger can be executed smoothly and how soon the group can generate synergies out of the combined logistics and retail operations to improve overall efficiencies. – WealthSec