The acquisition has secured for ALI-GDC a 50.4 percent controlling stake in BLC, the private consortium developing the Bonifacio Global City, one of the most sought-after real estate properties in the country.
The binding memorandum of agreement (MOA) was signed at the Tower Club in Makati City yesterday after several months of negotiations.
MPC vice president David Nugent said that it will, however, be subject to a number of closing terms and conditions and is expected to be finalized by January next year.
Aside from $90 million in upfront cash, the deal also involves the assignment to ALI-GDC of an additional P655 million in BLC notes currently owed by BLC to MPC, Nugent said.
Last June, the Gokongwei Group included the 50.4 percent BLC stake – representing the $90-million principal loan incurred by MPC to Larouge B.V., a wholly owned subsidiary of First Pacific of Hong Kong – as part of its aborted $925-million package to buy the 24.7 percent shareholding of First Pacific in Philippine Long Distance and Telephone Co. (PLDT).
Nugent said that while the buyout will significantly reduce MPC’s interest in BLC from 72.9 percent to only 22.5 percent, they will still be the second largest shareholder group in BLC, with three seats in the the 15-member board.
For their part, ALI-GDC said the deal will enhance its dominant position in the real estate industry.
"Adding Fort Bonifacio to our portfolio will provide a great opportunity for Ayala Land to replicate its success in the development of the Makati Central Business District (MCBD) as the country’s commercial and financial center," ALI chairman Fernando Zobel de Ayala said.
Unilab chairman and CEO Joselito Campos Jr. added that the Boni Land acquisition was a natural consequence of the excellent relationship of Unilab and GDC with ALI and First Pacific itself.
The Unilab Group previously acquired Darya Varia, one of the biggest pharmaceutical companies in Indonesia from First Pacific. Meanwhile, its partnership with ALI involve the 600-hectare high-end residential Ayala Greenfield estates in Calamba City in Laguna.
ALI president Francisco Licuanan III revealed that Ayala Land took an interest in the property as early as 1995. He pointed out that the property is the single most attractive available parcel of land in Metro Manila today and that they are acquiring it at a "fair price."
It will be recalled that in1995, the Bases Conversion Development Authority (BCDA) put up a 214-hectare portion of the Fort Bonifacio military base on the auction block as part of the government’s privatization program. The consortium led by MPC won in the landmark bidding with an offer price of just over P33,000 per square meter, easily beating ALI’s bid of P24,000 per square meter.
Since then, MPC and ALI have engaged in several other biddings, including the John Hay redevelopment in Baguio City and even in non-property concerns such as the water utility concession by the MWSS.
Late last year, MPC trashed ALI’s lone bid of P1.2 billion for the development rights to 19-hectare property at the northern portion of the Bonifacio Global City citing that ALI’s bid price was too low.
A month later, it was ALI’s turn to reject MPC’s $200 million counter offer involving the latter’s 69 percent stake in BLC noting that such price was unreasonable at the time.
But last month, an agreement for P800 million bridge financing facility to be extended by the ALI-GDC group to Fort Bonifacio Development Corp. (FBDC), the 55-45 joint venture between BLC and BCDA, for the completion of the Bonifacio Ridge condominium project provided the breakthrough for further proceeding with the $90-million buy-out deal.
Licuanan assured the public that ALI-GDC has the financial capability to see the development of the Bonifacio Global City as well as the combined resources to bring the property to the market sooner.
As early as now, ALI has already committed to develop Market! Market! — a super-regional shopping center consisting of 180,000 square meters of gross leasable area in a 10-hectare property in Fort Bonifacio. The center is now under construction and is expected to be operational by the fourth quarter of 2003.
ALI has also proposed to develop an 8.3 hecatare lot adjacent to Market! Market! into a residential community consisting of medium to high density housing and catering to, among other clients, Makati professionals. Development is expected to start within the next 18 months.