Brokers are upbeat with the initial public offering of San Miguel Corp.'s beer unit despite the lukewarm reception of retail investors.

Local brokerages are getting 50 percent of the offer allocation, supporting an issue that has been twice repriced.

A broker said the 50 percent uptake is already a good sign considering the weakness of the market.

"Brokers took up around 50 percent which is high already given broker allocation of P1.8 billion. The last IPO before San Miguel Brewery only had a take up of 15 percent. The local small investor's offer is still on going with thousands of employees and suppliers buying," said Francisco.

About 30 percent of the total offer was allocated for the local investors.

The local tranche wasoversubscribed a day before the close of subscriptions, one of two domestic underwriters said yesterday.

The overseas offer, which closed on April 24, was around 1-½times covered after being priced at the bottom of the range, sources said.

"It's oversubscribed, that is why we at BDO have to cut down some of our customers already," Eduardo Francisco, executive vice-president at BDO Capital Investment Corp said.

"The fact that you are cutting down, it is a good sign. That means the issue is really doing well even if the market is not doing well."

San Miguel Brewery, considered the food and beverage giant's crown jewel, has priced the offer at P8.0 per share, the low end of anP8.0-11.0- range. The shares will be listed on May 12.

Only 5 percent of the company's stock is being put on sale, giving the company P6.16 billion pesos in proceeds.

At the start of the year, San Miguel Brewery was gearing up to be the Philippines' biggest-ever IPO with maximum proceeds of $600 million plus, overshadowing conglomerate SM Investments' record $530 million offer in 2005.

But turbulent market conditions and investor complaints that the offer was too expensive forced San Miguel to twice shrink the price range from an original 9.50-16.30 pesos per share and halve size of the offer.

The beer business accounts for around 40 percent of group operating profit. In the first quarter of this year, it posted a 37 percent increase in net profit to 2.5 billion pesos on net sales up 13 percent.

The bulk of the IPO proceeds will be used to pay off San Miguel's debts.

Citigroup and ATR Kim-Eng Capital Partners are joint global coordinators in the San Miguel Brewery IPO. ATR Kim-Eng Capital and BDO Capital are joint domestic underwriters.

San Miguel's B shares, open to all investors, closed unchanged at P49 on Monday while it's A shares, reserved for locals, were up 50 centavos at P46.50.

The scheduled initial public offering of San Miguel Brewery has received quite a warm reception from the local investing public, according to one local underwriter, highlighting the goodwill that the name San Miguel has established with the local market.