SM group nearer Ortigas property bid

MANILA, Philippines–The SM Group is getting “nearer” to its bid to acquire a controlling stake in the property holding firm of the Ortigas family, one of the biggest landlords in the metropolis.

“Everything is ready. The financing is ready. We’re just waiting for final instruction,” Henry Sy Jr., vice chair of SM Investments Corp., said on Monday.

Sy, who is in charge of many of the group’s property projects including residential developer SM Development Corp. and leisure estate arm Highlands Prime Inc. (HPI), was asked about the progress of the talks with the Ortigas group at the sidelines of the annual stockholders meeting of HPI.

“It’s getting nearer and nearer,” Sy told reporters.

The SM group confirmed last February ongoing talks to acquire a controlling stake in Ortigas Holdings Inc. The old holding company Ortigas & Co. Ltd. was converted from a limited partnership into a corporate entity, a restructuring that paves the way for the entry of a new investor, a stock
debut or both.

Aside from the 16-hectare Greenhills shopping complex, Sy noted that the Ortigas group had a lot of “nice” properties such as the Tiendesitas complex in Libis. Sy added, however, that he could not give any timetable on the closing of the transaction.  A prospective transaction was earlier estimated at around $1 billion.

Asked whether the prospective takeover of Greenhills would gnaw at the market share of nearby Megamall – one of SM Prime Holdings Inc.’s most profitable malls – Sy said “the market is getting bigger and bigger.” With the growing population of Metro Manila and the increasing pool of business process outsourcing workers, Sy said the consumer market was continuing to grow.

An analyst has described SM’s prospective purchase of the Ortigases’ holding firm as a “game-changer” move that may propel SM Land or SM Development Corp. to the size of Ayala Land Inc. as this allows SM to secure large landbank in a major central business district.

SM group patriarch Henry Sy Sr. himself, who built a fortune out of retailing and shopping mall development and who now also owns the largest banking group in the country, has aggressively pursued this prospective transaction in the last few years, industry sources said.