SM denies talks to acquire stake in Philippine retailer Landers

MANILA — Philippine conglomerate SM Investments Corp. has denied reports that it is negotiating to acquire a stake in Landers Superstore, rejecting speculation that it could enter the country’s membership-warehouse retail market.

SM Investments Corp. (SMIC), which controls one of the Philippines’ largest retail networks, said Thursday that it was not in discussions with Landers or its shareholders.

“SM Investments Corporation (SMIC) cannot confirm the information in the news article as it is not the source of information cited in the article,” the company said in a Philippine Stock Exchange disclosure.

“SMIC does however confirm that it is not currently in any discussions or negotiations with Landers and its shareholders.”

The clarification came after Philippine Daily Inquirer’s Biz Buzz reported that SM and private equity firm CVC Capital Partners were discussing a possible transaction involving CVC’s interest in Southeast Asia Retail Inc., the operator of Landers Superstore.

According to the report cited in SM’s disclosure, CVC had invested in Landers in 2021 through a convertible bond subscribed to as a strategic partner of founder Lowell Yu. The investment was reported to represent an economic interest equivalent to about 49 percent.

The report estimated that a potential transaction, including interest, could cost SM almost $200 million.

SM’s disclosure, however, made clear that no such negotiations were currently taking place.

The company issued the statement after the Philippine Stock Exchange sought clarification over the Inquirer report, which was published on Oct. 1 under the headline “SM adds Landers to shopping cart.”

Landers is a members-only warehouse retailer that sells groceries, imported products and other merchandise in bulk. Its stores also offer services including dining and fuel stations, putting it in competition with S&R Membership Shopping, which is controlled by businessman Lucio Co.

CVC reportedly became a strategic partner of Landers as the retailer sought to accelerate its expansion in the Philippines. Recent reports said the private equity firm was preparing to exit its investment.

An acquisition of the reported stake by SM would have expanded the Sy family-led conglomerate’s presence into the membership-warehouse segment, adding another retail format to its extensive network of malls, supermarkets and other consumer businesses.

But analysts said SM’s latest disclosure means the reported transaction should not currently be treated as an active deal or an immediate catalyst for the company.

Philippine financial publication Philstar, citing an analysis by AB Capital, said the denial removed the basis for factoring a potential Landers acquisition into current valuations of SM or other companies affected by the competitive implications.

For now, SM’s position is that it has no ongoing discussions or negotiations with Landers and its shareholders, leaving the reported potential investment unconfirmed.