AGUILAR, JADE P. MKTG. 12 10:20 12:00 PM MS. MA.

ALMA CHUA
BSBA -MM2

Legal/ Ethical Pricing Issues

1. Local/ Domestic
1. Issue / Problem
Pure Foods sale fails on price, control issues
It could have been one of the biggest Philippine corporate deals this
year, valued at P1 billion to P8 billion by analysts. But the much-anticipated
sale of San Miguel Corp.'s stake in unit San Miguel Pure Foods Co. Inc., the
maker of Pure Foods hotdog, ham, and sausages, failed to materialize last
week after the conglomerate's directors decided to keep its majority interest
in its subsidiary. "The final bidders had sought 100-percent ownership," said
San Miguel president Ramon Ang in a statement. The problem of this is that
San Miguel sell their product in the two bidders but pricing it in different
price and the other bidder said that it was unfair.
But the issue of control of Pure Foods between both sides, apart from
the price, became contentious that resulted in a deadlock. Which the other
bidder reportedly found the offer price "too high".
SOURCE: http://www.gmanetwork.com/news/money/content/199130/pure-
foods-sale-fails-on-price-control-issues/story#sthash.jPlB1j08.dpuf

2. Provide 2 solutions:
Solution No.1: San Miguel may have to resort to a share sale or a follow-on
offering.
Solution No. 2: San Miguel may add more of the purchase products from the
one bidder who complains so by that the problem might still have to recover
and be solved.
3. Discuss the PROs and CONs of each solution.
In solution No. 1, the advantage of it is that the unfairness may be recover
and still they have the opportunity to still establish a good image from their
buyer/bidder. And the disadvantage of it is that the one who complains may
reject San Miguels offer that will lead to a bigger disaster. On the other
hand, the advantage of Solution No.2 is that still they will be able have the
opportunity for their offering to be accepted and its advantage is that they
can be still rejected and the one who complains will spread bad humors
about the San Miguel Company that would actually destroy its brand image.
4. Select the solution to address the issue
Answer: I think the best solution that would solve of the said problem is the
Solution No. 2
5.