Ayala Corporation and the Zobels’ holding firm Mermac Inc. are infusing P17.39 billion worth of real estate into Ayala Land Inc. through a property-for-equity swap.
In a disclosure to the Philippine Stock Exchange, ALI said its Board of Directors has approved the property-for-share swap with AC and Mermac during a special meeting.
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Subject to regulatory approvals, AC will subscribe to 309.6 million primary common shares of ALI for assets valued at P17.28 billion whie Mermac will subscribe to 1.98 million ALI common shares for assets worth P110.61 million.
The transactions will translate to an issuance by ALI of a total of 311.58 million primary common shares at a value of 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 shares in the 1-Billion Common Shares Carve Out approved by ALI shareholders in 2014.
The said shares are not subject to pre-emptive rights and do not require stockholders' approval under the Seventh Article of the Articles of Incorporation of ALI.
In a separate disclosure, AC said the assets it will transfer to ALI includes its 50 percent stake in Ayala Hotels, Inc., a joint venture of the Company with ALI that owns the lot leased to Manila Peninsula Hotel, Inc. and is ALI’s partner for Park Central Towers condominium project.
Also included are AC’s 100 percent stake in Darong Agricultural and Development Corporation, an operating company with land assets in Davao del Sur, together with AC’s three lots in the same area; 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.
The valuations used are supported by a fairness opinion issued by FTI Consulting Philippines, Inc. (FTI). AC and ALI engaged FTI, an independent firm accredited by both the PSE and the Securities and Exchange Commission, to issue a fairness opinion in accordance with applicable PSE and SEC requirements, supported by a valuation report of both the AC Assets and ALI Shares.
After making a determination that the fair range of values for the AC Assets is from P16.58 billion to P22.41 billion and the fair range of values for the ALI Shares is P49.44 to P76.50 per ALI Share, and noting the number of shares proposed to be issued to AC, FTI concluded that the transaction is fair from a financial point of view.
AC, ALI, and Mermac are targeting to complete the requirements within the year. Once approved by regulatory bodies, AC's ownership in ALI will increase from 46.1 percent to 47.2 percent of ALI’s total outstanding common shares.
This transaction forms part of AC’s strategic initiative to increase its ownership stake in ALI. In 2021, AC conducted a share block purchase program of ALI shares.