AYALA Land Inc. (ALI) said Tuesday that it was buying the shares of Aboitiz Equity Ventures Inc. (AEV) and Aboitiz Land Inc. (AboitizLand) in Cebu District Property Enterprise Inc. (CDPEI), their joint venture company in Cebu.
ALI and its partners had set up CDPEI in 2014 to engage in real estate development, particularly to build the proposed 17.5-hectare Gatewalk Central Superbloc mixed-use estate in Mandaue City.
In a disclosure, ALI said it had entered into a share sale and purchase agreement with AboitizLand and AEV to buy their 50 percent equity interest in CDPEI, equivalent to 18.1 million shares, at P100 per share or for a total consideration of P1.81 billion.
Once the transaction is closed, Ayala Land will own 100 percent of CDPEI.
In a separate filing, AEV said the P1.81 billion payment from ALI would be split between it and its real estate arm, AboitizLand.
AEV will receive about P1.63 billion for its 16.29 million Series "A" preferred shares in CDPEI while AboitizLand will receive P181 million for its 1.81 million common shares.
The consideration was determined based on an agreed valuation following a due diligence review. Payment will be made in cash and in tranches.
"The acquisition will consolidate Ayala Land's ownership of CDPEI that will contribute to Ayala Land's growing presence in the Visayas region," it said.
Meanwhile, AEV stressed that the transaction was aligned with its strategy to optimize resource allocation in the real estate industry.
ALI said the acquisition would be made through the execution of a definitive deed of assignment of shares upon fulfillment of customary conditions precedent.
These conditions include the necessary regulatory approvals from the Securities and Exchange Commission on CDPEI's increase in authorized capital stock and the Philippine Competition Commission.
On Tuesday, ALI shares closed up 1.08 percent at P28.05 each and AEV's share price rose 0.26 percent to P38.55 apiece amid a 0.23-percent decline in the benchmark Philippine Stock Exchange index.
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