MANILA - The government is inclined to accept the offer of San Miguel Corp. (SMC) to exchange the 24-percent sequestered SMC block from common to preferred shares, Finance Secretary Margarito Teves said yesterday.

However, Teves stressed that the government would only accept the offer if it does not affect the government’s ownership claim.

“We will avail of it to the extent that it will benefit farmers because it will earn interest and will be used to take care of their needs. At the same time it should not prejudice our claim on the ownership which we are working through the Supreme Court,” Teves told reporters yesterday on the sidelines of the Bureau of Internal Revenue’s (BIR) 105th anniversary celebration.

Teves said that through the swap, the government may be able to cash in on the higher yield.

“It is going to be helpful if there is improvement on the yield,” Teves said.

Preferred shares have higher dividend yield but holders do not have voting rights.

During San Miguel’s annual meeting last month, its shareholders approved the conversion of as much as P1.1-billion common shares to a new series of preferred shares. The shares are projected to yield about eight percent yearly.

The offering will run from July 27 to Aug. 20 this year with an option for SMC to extend the offer period.

SMC chairman and CEO Eduardo Cojuangco Jr. earlier said the offer was meant for shareholders who are more conservative and do not agree with the company’s diversification strategies.

“While the global financial meltdown has sent many companies into full retreat, our company is powering ahead, investing heavily in a strategy to accelerate growth,” Cojuangco said.

Last month, the government through the Office of the Solicitor General (OSG), sought the approval of the Supreme Court to sell its 24-percent stake in SMC.

The government shares include 446,452,536 San Miguel “A” shares and 307,395,776 “B” shares. It is in the name of the Coconut Industry Investment Fund (CIIF) and controlled by the government.

Teves said the government would have to wait for the approval of the Supreme Court before it accepts San Miguel’s share swap offer.