Mitsubishi cuts stake in Ayala

Japanese trading giant Mitsubishi Corp. has trimmed its stake in the Philippines’ oldest conglomerate Ayala Corp. with the sale of P7.94 billion worth of shares, seen as part of its “portfolio rebalancing.”

Mitsubishi unloaded 8.5 million common shares of Ayala at P934 per share in an equity deal arranged by Swiss investment house UBS, industry sources familiar with the transaction said yesterday.

As Mitsubishi’s shares are part of the nonpublicly traded shares of Ayala, this transaction is seen to boost the conglomerate’s public float by about 1.36 percentage point.

Prior to this, Mitsubishi held 10.15 percent of Ayala’s shares while the free float level was at 41.5 percent.

“Mitsubishi is just adjusting or rebalancing portfolio,” one source said, when asked about the Japanese firm’s rationale for paring the stake.

As the equity deal was priced at a discount of 7.5 percent from Ayala’s closing price of P1,010 per share on Monday, shares of the conglomerate tumbled by 7.23 percent to close at P937 per share.

As of Tuesday’s close, Ayala is valued by the stock market at about P627 billion.

“The sale of Mitsubishi would not have a fundamental impact on AC (Ayala Corp.) as these are secondary shares. However, the market may take this negatively as it sends a signal that the share price of AC are already fairly valued and could lead to more profit taking,” leading online stock brokerage COL Financial said in a research note.

COL’s fair value estimate for Ayala Corp. is P1,090 per share, representing a little upside potential from the current price.

“We inferred from AC’s latest public ownership report that Mitsubishi’s holdings are a part of the nonpublic shares and should Mitsubishi sell these shares to the public, AC’s float would increase by 1.36 percent to 42.86 percent from 41.5 percent,” local stock brokerage Papa Securities said.