Ayala Corp. and majority shareholder Mermac Inc. signed a property-for-share swap agreement with property unit Ayala Land Inc. worth P17.38 billion.
Under the agreement, Ayala Corp. will transfer P17.27 billion worth of assets to ALI in exchange for 309.597 million in primary common shares in the property firm. Mermac will also infuse P110.6 million worth of properties in exchange for 1.982 million ALI primary common shares.
The agreement is subject to regulatory approvals.
“We are delighted about this transaction. We view ALI as the natural owner of these properties and is in the best position to optimize their value. In addition, this deal is consistent with Ayala’s initiative to increase its ownership of ALI, similar to the block purchases of ALI shares we have done over the past year,” said Fernando Zobel de Ayala, Ayala Corp. president and chief executive.
The primary common shares to be issued by ALI to Ayala Corp. and Mermac will come from the property firm’s unissued common shares.
ALI said the said shares are not subject to pre-emptive rights and do not require stockholders’ approval.
“We are pleased with our agreement with Ayala Corp. to purchase properties in exchange for ALI shares. These properties are in key locations and will further expand our land bank and commercial assets. We are confident that the inclusion of these assets will further create value for our stakeholders,” said ALI president and chief executive Bernard Vincent Dy.
Among the properties to be infused by Ayala Corp. to ALI are its 50-percent ownership in Ayala Hotels Inc., the owner of the Manila Peninsula property and Park Central Towers project and several properties in Davao del Sur, Makati, Quezon City and Laguna.
Ayala Corp has 46.07-percent ownership in in ALI. Once approved by regulatory agencies, the conglomerate’s ownership in ALI will increase to 47.2 percent.
The parties expect to complete the requirements within the year.
Ayala Corp. and ALI engaged FTI Consulting Philippines Inc. to issue a third-party fairness opinion regarding the transaction. FTI, in its review, concluded that the transaction is fair from a financial point of view.
The share price of Ayala Corp. rose 2.7 percent Friday to close at P868 each, while the stock of ALI gained 1.6 percent to P34.65.
ALI reported attributable net income of P8.59 billion in the first three quarters of 2021, up by 35 percent from P6.37 billion a year ago, as consolidated revenues increased 15 percent to P72.6 billion from P63.32 billion.
The company said it achieved the sales recovery despite the re-imposition of stricter quarantine measures in August last year. ALI said it was expecting to sustain the business momentum with the reopening of the economy.