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[PHOTO - HENRY SY SR.: Game-changing move]
MANILA, FEBRUARY
11, 2012 (INQUIRER) By: Doris C. Dumlao - Tycoon Henry Sy Sr. is
finalizing a deal to acquire a majority stake in the privately held Ortigas
property group in a transaction worth around $1 billion, seen as a potential
"game-changing" move that will expand the SM group's landbank in the metropolis
and give it control of the 16-hectare Greenhills shopping complex.
Inquirer sources confirmed that the SM group was close to a deal to
buy into the Ortigases' property holding unit OCLP Holdings after a crucial
bloc, which included British banking giant HSBC and some family members,
consented to the deal.
The sources said that HSBC, the single biggest stockholder of OCLP with a
stake of 34 percent in the property unit, has already signed some documents
approving the sale. On the other hand, there was likewise a critical mass of
Ortigas family members who had agreed to the transaction, aiming to unlock more
values from their vast landholding.
The target was to finalize all documentation by March, at the latest, one
source said.
Shares of Sy-affiliated companies, particularly SM Investments Corp. and SM
Prime Holdings, outperformed Wednesday due to the excitement on this prospective
transaction with the Ortigas group.
SM Prime surged 4.7 percent to P15.60 a share while SMIC was up 2.4 percent
to P692 each.
Jose Mari Lacson, head of research at local stockbrokerage Campos
Lanuza & Co., said this was a potential "game-changer" move that could
propel the SM group's SM Land or SM Development Corp. to the size of Ayala Land
Inc.
"It allows them to secure a large landbank in a major central business
district. Ayala can now pick on somebody its own size," Lacson said.
The Ortigas group has a vast urban landbank spanning Mandaluyong, San Juan
and Quezon City, the crown jewel of which is Greenhills shopping center.
It is not yet known which SM unit or units will take part in the transaction
but SM Prime is seen benefiting significantly given the Greenhills landbank.
"Only SMIC can muster that money without straining its balance sheet too
much," Lacson said. He added that the group could also choose to use SM Land but
this unit would have to raise cash, although a share-swap was also seen as a
possibility.
Just last week, SM Investments raised $250 million from the sale of five-year
bonds convertible into equity.
Both the SM and Ortigas groups declined to comment on the prospective
transaction Wednesday.
The Inquirer reported last December that the Ortigases have restructured
their core unit into a new corporate entity to prepare for either the entry of a
new strategic investor or a stock market debut.
Industry sources said HSBC had initiated the move to transform the closely
held limited partnership Ortigas & Co. into a corporation. Under a limited
partnership, general partners team up with one or more limited partners who, in
turn, enjoy limited liability as long they do not participate in the control of
the business. The general partners under this structure are the ones who carry
more liability.
Chief News Editor: Sol Jose Vanzi
© Copyright, 2012 by PHILIPPINE HEADLINE NEWS ONLINE
All
rights reserved
PHILIPPINE
HEADLINE NEWS ONLINE [PHNO] WEBSITE
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