Ayala Corp., Mermac to boost Ayala Land's property holdings

MANILA, Philippines — Ayala Corp. (AC) and its biggest stockholder will infuse more properties to Ayala Land Inc. (ALI) in exchange for more shares, believing that its subsidiary will “optimize” the value of these real estate assets.

AC and Mermac Inc. — a healthcare facilities provider owned by the Zobel family and AC's largest shareholder — will transfer five real estate assets located in “key locations” to ALI in a property-for-share swap deal targeted to be completed this year, according to regulatory filings on Friday.

Under the transaction, AC will swap property assets valued at P17.28 billion for 309.6 million primary common shares in ALI. AC's ownership in the property subsidiary will inch up to 47.2% from the current 46.07% once the swap is completed.

The assets that AC will transfer to ALI are its 50% stake in Ayala Hotels Inc.; its 100% stake in Darong Agricultural and Development Corp.; its office units at the 32nd to 35th Floors of Tower One and Exchange Plaza with appurtenant parking slots; its lot with improvements in Brgy. Bagumbayan, Quezon City along C5 Road; and its land in Calauan, Laguna.

Meanwhile, Mermac will own 1.98 million more primary common shares in ALI which, in turn, will receive real estate assets worth P110.6 million.

The stocks that ALI will issue to AC and Mermac will come from the unissued shares in the 1-billion common shares carve-out approved by ALI shareholders in 2014.

"We view ALI as the natural owner of these properties and is in the best position to optimize their value,” Fernando Zobel de Ayala, AC president and chief executive, said.

“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," Zobel added.

On Friday, shares in AC capped the week up 2.25% while ALI gained 1.61%.