SCREENGRAB from www.smprime.com
MANILA, Philippines — Property giant SM Prime Holdings Inc. has raised P18 billion from the sale of shares held in its own treasury, raising fresh equity while increasing its public float.
Part of the proceeds will be used by the SMPH to fund its investment in the OCLP Holdings Inc., the holding company of Ortigas & Co.
In a disclosure to the Philippine Stock Exchange on Thursday, Southeast Asia’s largest property developer said it had placed out 1.06 million treasury shares at P17 each through an overnight book-building.
The equity deal was priced at a 4.9 percent discount to Wednesday’s closing of P17.88 per share.
This transaction released to the public nearly a fifth of its treasury-held shares, referring to its own shares purchased by the company using retained earnings. Companies typically buy back shares from the open market when they deem that their shares are undervalued by the market. After the transaction, SMPH is still left with 5.347 million of its own shares in the treasury while outstanding stocks stood at 28.879 million.
SMPH said there was strong interest from high-quality institutional investors in Asia, Europe and the United States for the equity offering.
J.P. Morgan Securities plc and Macquarie Capital Securities (Singapore) Pte. Ltd. acted as joint bookrunners while BDO Capital & Investment Corp. was the domestic lead manager for the placement.
“The proceeds raised from the placement will partially finance the company’s capital expenditures, general corporate purposes, and potential acquisitions, including the recently announced partnership in OCLP Holdings Inc, the holding company of Ortigas & Co., owners of strategic land bank and properties in key cities around Metro Manila,” the disclosure said.
The SM and Ayala groups earlier ended their squabble over the Ortigas family’s OCLP Holdings, making a pact to share the boardroom and work together to develop a premium landbank in the metropolis. As such, SMPH and ALI entered into a partnership with the Francisco Ortigas and Rafael Ortigas groups, two of the major voting blocks within the Ortigas family.
It was earlier reported that the SM group has offered to purchase the stake held by the group of Francisco and Fernando Ortigas equivalent to around 40 percent.
Both SM and Ayala are drawn to OCLP given the Ortigas family’s rich landbank in the metropolis, the crown jewel of which is the 16-hectare Greenhills shopping complex in San Juan. Other projects include the mixed-use Capitol Commons and the Tiendesitas commercial hub in Pasig.
OCLP’s current landbank is estimated at around 50 hectares but it can add another 40 hectares of prime land to its landbank, including portions of Camp Crame (10 hectares) and Camp Aguinaldo (30 hectares), which were donated to the government years ago but which it had the right to buy back in the future.