PROPERTY giant Ayala Land Inc. is hatching an alliance with the Ortigas group for the development of the latter’s vast urban landbank, coming in as a prospective strategic partner in the family’s holding company in lieu of a takeover attempt by tycoon Henry Sy.
In a disclosure to the Philippine Stock Exchange Friday, ALI said it had obtained authority from the board to negotiate and enter into a strategic alliance with the group led by Ignacio Ortigas “for the purpose of allowing the company to participate in OCLP Holdings Inc., the parent company of Ortigas & Co Ltd.”
ALI said it had allocated an initial amount of P15 billion for the partnership and in the development of various properties and businesses.
This followed the consolidation by the Ortigas family of its interest in OCLP Holdings by buying the 34-percent stake held by British banking giant HSBC for about P11 billion.
The Ortigas family members who bought the stake from HSBC—the single biggest stockholder in the property company—could not divest their stake under a lock-up period. But this deal effectively consolidated a controlling interest within the family, making it easier to sell an enlarged stake to a new investor in case the Ortigas family takes this route in the future.
“The existing stockholders, which consist primarily of the Ortigas groups, exercised their right of first refusal on HSBC shares on Ortigas Holdings Inc.,” SM Investments investor relations officer Cora Guidote said in a text message Thursday night.
Banking sources confirmed that payment for the 34-percent holdings was paid to HSBC as of Thursday.
Industry sources said family members from both factions jointly put up funding to buy HSBC’s stake.
It was earlier reported in Biz Buzz that some Ortigas family members have started talking to the Zobels to foil the entry of the SM group.
For its part, ALI said: “The strategic alliance is consistent with Ayala Land’s thrust of expanding its operations to other areas within and outside Metro Manila through partnerships.”
“The alliance is expected to generate significant synergies with the other projects of the company in nearby communities such as the integrated mixed use projects in the Pasig and Mandaluyong areas as well as Bonifacio Global City and Makati central business district,” it said.
“Our company intends to contribute its expertise in building large-scale, mixed use developments to this partnership. This development project includes plans for residential, office, retail and hotel components,” ALI said.
Ortigas Holdings was created when Ortigas & Co. Ltd. was converted from a limited partnership into a corporate entity, a restructuring that paves 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.