MANILA, Philippines (2nd UPDATE) - SM Investments Corp., the holding firm of the country's richest man Henry Sy, on Thursday said it was in talks to acquire a majority stake in Ortigas Holdings Inc., which owns the Greenhills shopping complex.
"We confirm that SM group is in the process of discussion for the acquisition of majority interest in Ortigas Holdings Inc.," Jose Sio, executive vice president of SM Investments, the country's third-largest company with market value of $10 billion.
"The amount and details of the transaction are still under discussion and subject to finalization," he said in a disclosure to the stock exchange.
In a statement, J. Rowell L. Recinto President and CEO of Ortigas & Company Limited Partnership (OCLP) Holdings, Inc., said: “It is our understanding that some key shareholders are in dialogue and discussion with a prospective buyer but that a deal has not been concluded. In the meantime it is business as usual for the company."
The Philippine Daily Inquirer earlier reported that SM is finalizing a deal to buy a majority stake in Ortigas property group for $1 billion.
The paper said SM group was in talks with the Ortigas family members and HSBC, the single biggest shareholder in the family's property holding firm with a stake of 34%.
It was not clear what vehicle within the SM group would do the deal, with units mall developer SM Prime Holdings Inc. and property developer SM Development Corp. all possibilities.
The Ortigas group has vast properties in Mandaluyong, San Juan and Quezon City. It owns the 16-hectare Greenhills shopping center, where V-Mall houses 5 SM franchises namely Toy Kingdom chain, SM Appliance Center, Our Home, Watsons, and Ace Hardware.
In a research note, CitisecOnline said this acquisition by the SM group is a "positive development" since this will give the Sy-led company access to Ortigas' vast landbank.
After the transaction, SM "will control the lion's share of the retail market in the Ortigas area with Megamall and Greenhills under in control."
SM Prime, the Philippines' largest mall operator and developer, was down 0.64% at P15.50 per share in the local market at 11:42 a.m. on Thursday. Its parent, SM Investments Corp., was also down 0.7% at P687 apiece. - With a report from Reuters