Diversifying conglomerate San Miguel Corporation has shortlisted its prospective buyers of a minority stake in San Miguel Pure Foods Company from five to just two bidders.

In a text message to reporters by an SMC spokesperson, SMC president Ramon S. Ang said the two bidders will proceed to do further due diligence prior to final negotiations.

The spokesperson declined to identify the two remaining bidders citing confidentiality clauses. Stock market analysts believe SMC may not be happy with the bids and is thus pursuing further negotiations.

Ang said earlier that three local firms, consisting of Universal Robina Corporation of the Gokongwei group, NutriAsia of the Campos family and the Aboitiz group, and one foreign company had submitted bids for Pure Foods last July 20.

However, it was reported that the Carlyle Group, the world’s second-largest private-equity firm, dropped out from bidding for a stake in SMPFC on price concerns.

Carlyle and other bidders had valued the company at about $1 billion or less. (Report from Bloomberg)

SMC had said that it may opt to do a public offer of its shares in Pure Foods as an alternative divestment route if it does not get an acceptable offer for a substantial stake in the 97 percent-owned unit.

Ang had earlier said that San Miguel might sell up to 49 percent of Pure Foods to help finance the conglomerate's expansion plans.

He said the firm is worth around $1.8 billion although recent estimates put the bid price at around $2 billion. Pure Foods has a market capitalization of P57.5 billion ($1.24 billion).

Ang said the original plan for SMPFC was to sell a 49 percent stake via a follow-on offering of secondary shares.

However, Ang said there were offers for a direct acquisitions so SMC has to consider these offers since it is much faster and cheaper to sell the stake directly to one buyer instead of undergoing a public offer.

While SMC is willing to sell a controlling stake in SMPFC, Ang said it will have to be a “spectacular” offer since their plan is really just to sell a 49 percent interest in the subsidiary.

SMPFC president Francisco Alejo III said the sale will not be based purely on financial considerations since the buyer will have to be a strategic investor that will be able to steer the company to greater growth.