Andrew Tan consolidates property units under Megaworld
MANILA, Philippines - Tycoon Andrew Tan is consolidating all of its property units under Megaworld Corp.
This comes as Megaworld announced on Friday it is acquiring parent company Alliance Global Group Inc.'s (AGI) 49.20 percent stake in its tourism estate developer Global-Estate Resorts, Inc. (GERI) for P10.43 billion.
After the acquisition, Megaworld will have a majority (74.96 percent) stake in GERI.
"The company offered to purchase the GERI shares at P1.93 per share based on the 30- day volume weighted average price (VWAP) of GERI shares as of April 30, 2014," the company said.
Megaworld said it will also initiate a mandatory tender offer for the remaining GERI shares held by minority stockholders.
The move will consolidate all real estate businesses of AGI under Megaworld, "enabling the company to capitalize on real estate opportunities and to capture the expected growth momentum of its real estate affiliates."
In 2013, Megaworld said it was acquiring Suntrust Properties, Inc. to make it a wholly-owned subsidiary. Megaworld also owns 82-percent of Empire East Land Holdings, Inc.
"We are excited that this consolidation will enable us to further capture the growth in the tourism sector through GERI’s projects. The exposure to the tourism industry will also complement our leadership position as the no. 1 landlord and developer of office spaces in the Philippines, specifically for information technology-business process outsourcing (IT-BPO) companies, which are considered key growth drivers of the Philippine economy in the next decade. The consolidation will also increase our landbank all over the Philippines to more than 3,900 hectares," Francisco Canuto, chief finance officer at Megaworld, said in a statement.
Among GERI's projects are Boracay Newcoast in Boracay Island; Twin Lakes in Tagaytay; Sta. Barbara Heights in Iloilo; and Southwoods City in the boundary of Carmona, Cavite and Binan, Laguna.
In 2013, Megaworld reported a 22 percent increase in net profit to P9.03 billion in 2013, from P7.41 billion in 2012. The company said it continued to see strong sales from its residential projects in Newport City, Uptown Bonifacio, McKinley Hill and Eastwood City; as well as higher leasing income from its office and retail portfolio.