UMVA has learned that MerryMart Consumer Corp. is taking a bold step towards consolidating operations, improving efficiency, and boosting long-term resilience in the face of macroeconomic uncertainty.
The company's proposed delisting and participation in DoubleDragon Corp.'s tender offer are designed to integrate MerryMart more tightly within the DoubleDragon Group, allowing for operational streamlining and cost efficiency. This move comes as Philippine equities have broadly weakened across sectors amid volatile economic conditions, weighing on investor sentiment and valuations.
MerryMart founder Edgar "Injap" J. Sia II painted a cautious outlook for the market, telling shareholders that "the silver lining is not yet clear on the horizon." However, he expressed optimism about the benefits of being part of the DoubleDragon ecosystem, citing advantages such as streamlined operations, cost effectiveness, and resilience to economic instability.
The planned delisting from the Philippine Stock Exchange has been approved by MerryMart's board, with shareholders scheduled to vote on July 7. If completed, the tender offer will allow the company to proceed with its integration into DoubleDragon, marking its full integration into the group's portfolio.
Under the offer, shareholders may exchange their MerryMart shares for a mix of 50% cash and 50% DoubleDragon shares, giving existing investors the option to remain exposed to the combined group through equity ownership in DoubleDragon. The structure implies a value for DoubleDragon shares offered under the exchange that is lower than MerryMart's latest book value, but potential upside might come from the execution of long-term expansion plans.
Mr. Sia outlined an ambitious long-term roadmap extending to 2035, which includes aggressive expansion across the Philippines and overseas through DoubleDragon units. The group plans to expand its footprint across all 82 Philippine provinces and scale its Hotel101 brand to 100 countries, targeting more than P500 billion in consolidated revenue and over P50 billion in net income by 2035.
As the group works towards achieving its targets, Mr. Sia emphasized that it would represent a major milestone for the domestic entrepreneurial sector. With a debt-free balance sheet and annual dividends exceeding P12 billion, DoubleDragon is poised for significant growth, sending its shares up 7.84% to P11 each, while MerryMart last traded at P0.435 on June 1.
