Ayala Land sells P2.7B block of AREIT at P36.20/share

Ayala Land [ALI 36.30 ?0.8%; 153% avgVol] [link] disclosed after the market close on Friday that it sold 75 million shares of AREIT [AREIT 37.50 ?0.5%; 322% avgVol] in a block sale at P36.20/share to raise P2.715 billion. This is the third time ALI has sold a significant stake in AREIT through a block sale. It sold P5.6 billion worth in January and P3.2 billion worth in May. This is the smallest of the three transactions.

MB BOTTOM-LINE:  Block sale has been the preferred way for REIT sponsors to clear up some public float space in FY24. If AREIT gets spanked today at the open, this transaction will be the reason why. I don’t expect the market’s reaction to be nearly as severe to this sale as it was to the first in January when the stock dropped 4.5% after the block sale was announced at a 7.2% discount. AREIT dropped 3.4% in May on a block sale at a 5% discount. This deal was done at a 4% discount, so I expect a drop but not a panicked one. I’m still expecting REIT stock prices to float gently higher in the near term, so perhaps the impact of the block sale will be further subdued by that REIT-wide movement.

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