SEC extends SM Land deadline to swap sister firms' shares for SM Prime

From the original deadline of July 9, the Securities and Commission gave SM Land Inc. until August 2 to acquire the shares of sister companies SM Development Corp. and Highlands Prime Inc. in a tender offer under the plan to consolidate all Sy-led property companies under one roof.

 

The tender offer started July 4, but SM Land ask for an extension as shareholders SM Development and Highlands Prime failed to file the necessary documents to have the transaction done within the original time table.

 

Late Monday, the SEC en banc allowed SM Land to extend August the tender offer period.

 

According to the SEC approval made available on Tuesday, shareholders of SM Development and Highlands Prime have until Aug. 2 to tender their shares in favor of SM Land.

 

SM Development informed the regulator that as of June 24, only 1.061 billion shares or 11.45 percent of SM Development shares and 1.487 billion or 66.22 percent of Highlands Prime were tendered.

 

SM Land’s acquisition of SM Development and Highlands Prime shares is the first step in the planned merger of Sy family’s property assets.

 

Under the tender offer, SM Land is offering SM Prime shares for SM Development and Highlands Prime shares—in effect a share swap deal.

 

Under the terms of the deal, each SM Development share will be swap for 0.472 SM Prime Holdings Inc. shares and each stock Highlands Prime 0.135 of SM Prime shares.

 

Once the transaction is complete, SM Land will merge with SM Prime— which will emerge as the surviving entity.

 

SM Prime would then acquire specific real estate companies and assets currently held by SM Investments Corp.—the holding firm of the SM Group—in exchange for new shares in SM Prime. Part of the acquisitions would be the 60-hectare Mall of Asia Complex in Pasay City. 

 

With the SM Group's property units and assets under SM Prime, the holding firm will emerge as the biggest property development company in Southeast Asia with at least $14 billion in market capitalization.

 

SM Prime would also book a net income of P17 billion from P10.9 billion and revenues of P57.4 billion from P30.7 billion once the merger is complete.

 

For the whole transaction, SM Group hired BDO Capital and Investment Corporation—a part of the group—J.P. Morgan (S.E.A.) Limited and Macquarie Capital (Singapore) Pte. Limited as financial advisors for the reorganization.

 

Manabat San Agustin & Co., KPMG International in the Philippines, were hired as independent financial advisors to the consolidation phase. — VS, GMA News