Property developers SM Development Corp. and Highlands Prime Inc. have filed a petition for delisting from the Philippine Stock Exchange in line with the consolidation of SM property units into a single publicly listed entity under SM Prime Holdings Inc.
In separate disclosures to the local stock exchange, SMDC and HPI said they have filed the petition for voluntary delisting after the SM group, through privately held unit SM Land Inc., completed a tender offer to minority shareholders of SMDC and HP, executing the first step in the consolidation of property units to create Southeast Asia’s biggest real estate firm.
SM Land has acquired 98.9 percent of SMDC and 99.85 percent of HP.
This completes the first of three steps under the consolidation framework. SM Land used shares in SM Prime Holdings Inc., which will be the surviving entity after the merger of SM property units, as currency to pay for its purchase of shares in SMDC and HPI. Shares of SM Prime, SMDC and HP valued at a total of P64 billion were crossed on the local stock exchange last month in relation to this transaction.
After consolidating ownership of SMDC and HP in SM Land, the second step will be the merger of SM Land with SM Prime. The third and final step will be SM Prime’s acquisition of specific real estate companies and assets currently held by the Sys’ holding firm SM Investments Corp. (SMIC) in exchange for new shares in SM Prime. The consolidation has an estimated transaction value of P279 billion.
The third step in the consolidation allows the backdoor-listing into SM Prime of several unlisted assets under SM Land, including 40 hectares of Pico de Loro leisure estate in Hamilo Coast, the 60-hectare land on which the Mall of Asia complex stands on, the hotels and convention centers under parent SMIC and some physical assets of the retail unit.
The enlarged SM Prime will be chaired by Henry Sy Jr., with patriarch Henry Sy Sr. as chair emeritus. Hans Sy and Jeffrey Lim will continue their existing roles as president and chief finance officer of the enlarged SM Prime, the country’s largest shopping mall developer.
The SM property group posted a net profit of P7 billion in the first semester, up 14 percent year-on-year. This was on the back of a 7-percent rise in revenues to P31 billion. Doris C. Dumlao