Ortigas buys out HSBC stake in Ortigas holdings

MANILA, Philippines—The Ortigas family has consolidated its interest in the property holding company Ortigas Holdings Inc. by buying out the 34-percent stake held by British banking giant HSBC for about P11 billion.

The acquisition of HSBC’s stake gives the Ortigases time to think about their options while two property giants SM and Ayala groups are seen competing with each other for control of the urban property developer.

The Ortigas family members who bought the stake from HSBC, the single biggest stockholder in the property company, cannot divest their stake within a specified period of time under a lock-up provision.  But this deal effectively consolidated controlling interest within the family, which makes it easier to sell an enlarged stake to a new investor in case the Ortigases decide to take this route in the future.

“The existing stockholders which consist primarily of the Ortigas groups exercised their right of first refusal on HSBC shares in Ortigas Holdings Inc.,” SM Investments Corp. Cora Guidote said in a text message Thursday night.

Banking sources confirmed that payment for the stake was paid to HSBC as of Thursday.

It was earlier reported that one faction  within the Ortigas family was willing to take in SMIC as a new investor while other faction  preferred the Ayalas.

Industry sources said family members from both factions jointly put up the money to buy out HSBC’s stake.

Ortigas Holdings was created when Ortigas & Co. Ltd. was converted from a limited partnership into a corporate entity, a restructuring that paved the way for the entry of a new investor, a stock debut or both. It had taken some time for the Ortigas holding firm to take this corporate route because of the diverse ownership, the old partnership being a very old entity whose shares of stocks had been passed on from one generation to another.

A key urban developer, Ortigas Holdings has 50 hectares of land in Quezon City, Pasig, San Juan and Mandaluyong, the crown jewel of which is the 16-hectare Greenhills property complex. Another 40 hectares of prime land can be added to its land bank, which includes portions of Camp Crame (10 hectares) and Camp Aguinaldo (30 hectares), which were donated to the government years ago with the  right to get the land back if the government uses the land for purposes other than what it was donated for.