Ayala enters into property-for-share swap with ALI

MANILA, Philippines — Ayala Corp. (AC), the country’s oldest conglomerate, and Mermac Inc., the holding company of the Zobel family, will transfer five  prime property developments including the two-hectare Manila Peninsula property to Ayala Land Inc. (ALI) for possible future redevelopment.

Fernando Zobel de Ayala, AC president and CEO and ALI chairman, said the property giant is in the best position to unlock the full potential of the property assets.

“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,” Zobel said.

In separate disclosures yesterday, AC and ALI said this would be done in exchange for shares in ALI.

Among the assets to be transferred are AC’s 50 percent ownership in Ayala Hotels Inc., which owns the Manila Peninsula property; 100 percent ownership in Darong Agricultural and Development Corp. and AC’s three lots in the same area; AC’s office units at Tower One in Makati valued at P1.3 billion; Honda Pasig property valued at P993 million; AC’s Calauan Property in Laguna valued at P78 million; and AC’s Calauan Property in Laguna valued at P78 million to be used to expand ALI’s socialized housing presence for BellaVita in Southern Luzon.

In exchange for its properties with a total value of P17.3 billion, AC will subscribe to 309.6 million primary common shares while Mermac will subscribe to two million primary common shares for its assets worth P110.6 million for a total of  311.6 million primary common shares valued  P55.80 per share, as validated by a third-party fairness opinion.

The primary common shares to be issued by ALI to AC and Mermac will come from the unissued 515 million shares in the one billion common share carve out approved by ALI shareholders in 2014.

The shares are not subject to pre-emptive rights and do not require stockholders.

AC and ALI engaged FTI Consulting Philippines Inc. (FTI), an independent firm accredited by both the Philippine Stock Exchange (PSE) and the Securities and Exchange Commission (SEC), to issue a fairness opinion following applicable PSE and SEC requirements, supported by a valuation report on the AC assets and ALI shares.

“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 landbank and commercial assets. We are confident that the inclusion of these assets will further create value for our stakeholders,” said ALI president and CEO Bernard Vincent Dy.

AC has a 46.07 percent share in ALI. Once approved by regulatory bodies, AC’s ownership in ALI will increase to 47.2 percent.