SOURCE:https://www.philstar.com/business/stock-commentary/2022/01/24/2156010/ayala-corp-push-p173b-assets-ayala-land-property-share-swap

The news came out of AC’s board of directors meeting and will see Ayala Corp [AC 868.00 2.72%] and Mermac, the Ayala Family’s private holdco, transfer P17.3 billion worth of real estate assets.

AC will receive 309,597,711 primary (unissued) common shares of Ayala Land [ALI 34.65 1.61%] at a per-share valuation of P55.80.

The fairness opinion for the value of the AC assets was between P16.58 billion and P22.41 billion, and the value of the ALI shares P49.44 to P76.50 per share.

The parties anticipate completing the transaction within the year, and once complete will result in AC owning 47.2% of ALI (up from 46.1%), in line with AC”s strategic goal to increase its stake in ALI.

The properties to be transferred from AC to ALI include: “50% stake in Ayala Hotels, Inc., a joint venture of the Company with ALI that owns the lot leased to Manila Peninsula Hotel, Inc.;… its 100% 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.”

MB BOTTOM-LINE

The announcement was made before the trading day began, and both AC and ALI gained during the session. Granted, the general trend in the market that day was positive, but it’s reassuring for holders of All Things Ayala to see the market react positively to large reorganization moves like this.

The new life-cycle for Ayala Family-owned land is for group assets to get organized under ALI, then for ALI to bundle developed assets together for transfer into AREIT [AREIT 52.05 0.10%] to recycle the capital and start the process over again, except this time at the ALI level.