Megaworld hikes stake in property firm

Megaworld Corp. on Friday completed its acquisition of a controlling stake in Global-Estate Resorts Inc. (Geri), scaling up its interest in tourism estate development.

In a cross sale at the local stock exchange Friday, parent conglomerate Alliance Global Group Inc. sold 5.405 billion shares of Geri to Megaworld at the tender offer price of P1.93 a share. Megaworld wound up with 80.4-percent stake in Geri.

Also, Megaworld sold 1.125 billion shares of Travellers International to AGI at P9.27 a share.

The total price consideration for both transactions is P10.432 billion. The deals allowed Megaworld to unlock values from its shares in Travellers as it reinvested the proceeds in Geri.

The property developer used to own the portion of the land in Newport City where Travellers put up integrated gaming complex Resorts World Manila.

Megaworld shareholders who invested in Travellers at P1 (at par) sold the same shares for P9.27 apiece.

“That’s a great deal in four or five years…. They should be happy,” Megaworld executive director Kingson Sian said, referring to the shareholders.

Earlier, Megaworld bought the 49.2-percent stake in Geri held by AGI, initially raising its interest to 74.96 percent. Its stake in Geri further rose to 80.4 percent after the tender offer to minority shareholders.

As for Travellers, Megaworld secured 291 million shares in the company in exchange for the land ceded for the Resorts World development in Newport City. By collecting shares instead of cash at a time when land values were lower, Megaworld benefited from the development of the integrated tourism estate, Sian told reporters after the annual stockholders meeting of Megaworld.

With the majority acquisition of Geri, Megaworld added around 3,000 hectares to its land bank. It now has close to 4,000 hectares of land in its portfolio, The properties are located in Tagaytay, Alabang, Iloilo, Cagayan de Oro and Boracay.

“Megaworld’s acquisition of Geri signals our official entry to the country’s tourism industry. We will be bringing the 25-year expertise of Megaworld in mixed-use developments, which we call ‘townships,’ to the projects of Geri,” Megaworld founder and chair Andrew Tan said in a statement.

One of Geri’s biggest projects is the 1,149-hectare Twin Lakes, a European-inspired integrated tourism estate with a vineyard. The estate is located in Tagaytay, overlooking Taal Lake.

The development will have themed residential villages, luxury condominiums, hotels and spa, a retirement community, schools, commercial and retail hubs as well as sports and leisure facilities.

Geri also owns the 150-hectare Boracay Newcoast on Boracay Island which will soon be home to four international hotels, a Santorini-inspired boutique hotel district, an Ibiza-inspired commercial district, a residential village, luxury condominiums and upscale villas.

Newcoast takes up 14 percent of the entire Boracay Island and is surrounded by Fairways and Bluewater, the island’s only golf course.

On the boundaries of Carmona, Cavite and Biñan in Laguna, Geri is also developing Southwoods City, described to be the next central business district south of Manila. It is also surrounded by a golf course.

The 561-hectare development will be home to residential villages, residential condominiums, office towers, a mall, as well as commercial and retail centers.

The 170-hectare Sta. Barbara Heights in Sta. Barbara, Iloilo is a vast township located next to the Sta. Barbara Golf Course, said to be Asia’s oldest golf course.

More than half of the development will be devoted to residential villages, while the rest will be allocated for office towers as well as commercial and retail strips connected to the new Iloilo International Airport.

“Megaworld will take an active role in the masterplanning and conceptualization of these townships. We will also incorporate our pioneering live-work-play-learn concepts and international inspirations into these developments, with special focus on tourism,” said Jericho Go, Megaworld senior vice president.

Apart from Geri, Megaworld owns 100 percent of Suntrust Properties Inc. and majority of Empire East Land Holdings Inc.

With the consolidation of all the real estate businesses of Andrew Tan’s group under the Megaworld brand, the property development hopes to capitalize on real estate opportunities and to capture the expected growth momentum of its real estate affiliates.