Ayala sets P19.5-billion share repurchase

MANILA, Philippines — Ayala Corp. is ready to cough up about P19.5 billion to buy back shares from public investors, as it moves closer to an expanded tie-up with Japan’s Mitsubishi Corp.

The homegrown conglomerate on Wednesday said it plans to launch a voluntary tender offer to purchase 30.06 million common shares from all holders.

READ: Mitsubishi to raise Ayala stake through P 44.5-billion deal

This represents about 4.85 percent of its total issued and outstanding common shares, priced at P650 apiece. The amount remains subject to the satisfaction or waiver of certain conditions.

The offer period is eyed on Nov. 4, giving shareholders the chance to convert their shares into cash.

This came as the company secured in late September its board of directors’ approval to pursue a voluntary tender offer amid a planned major investment deal with Mitsubishi.

In the same month, the Philippines’ oldest conglomerate said it had signed a definitive agreement with the Japanese giant, with the latter possibly investing about P44.5 billion.

Once completed, Mitsubishi’s economic ownership in Ayala will increase to 15 percent from 4.7 percent. Meanwhile, its voting stake will climb to 20 percent.

“This transaction represents much more than a capital investment,” Ayala chair Jaime Augusto Zobel de Ayala earlier said.

Ayala president and CEO Cezar Consing likewise called the development “turbo-charging a 52-year relationship.”

With the massive capital injection into Ayala’s operations, both parties aim to beef up their collaboration on infrastructure, energy transition, real estate, digital technologies, mobility and logistics as well as other emerging industries.

READ: Mitsubishi prepares P 7-B EV export hub plan

Juan Paolo Colet, managing director at investment bank China Bank Capital Corp., said the multibillion-peso agreement was “well structured as it not only infuses cash into the company, but also gives public shareholders an opportunity to sell some shares at a premium.”

“Given the company’s high public float and Mitsubishi’s target stake, there is no risk of delisting,” Colet added. INQ