Ayala Land Inc., the second-biggest property developer, said Friday it finalized the acquisition of a majority stake in Prime Orion Properties Inc., the company that owns the Tutuban retail complex in the shopping district of Divisoria in Tondo, Manila.
Ayala Land and POPI said in separate disclosures to the stock exchange they signed a sale agreement, in which Ayala Land subscribed to 2.5 billion common shares of stock of POPI, or equivalent to a 51.06-percent stake in the company.
The transaction, priced at P2.25 per share, totaled P5.625 billion.
Ayala Land said it initially paid P1.406 billion, or 25 percent of the total subscription price. The company will pay the balance of 75 percent after the fulfillment of certain terms and conditions.
To implement Ayala Land’s subscription, POPI will file with the Securities and Exchange an application to increase its authorized capital stock from P2.4 billion to P7.5 billion, divided into 7.5 million common shares of stock, with a par value of P1 apiece.
The public float of POPI will drop to 32.16 percent from the current 65.62 percent after the transaction.
Ayala Land earlier said the acquisition of POPI was part of the company’s strategy to expand its leasing business.
Tutuban Center is a bargain retail complex on a 20-hectare property that will be location of the North South Railway Project Transfer Station, which will interconnect with the LRT 2 West Station.
Tutuban Center currently has 60,000 square meters of gross leasable space. Ayala Land plans to expand the retail complex by adding another 40,000 square meters of leasable space over the next two to three years.
Ayala Land has been strengthening its recurring income business by developing more shopping malls, office and hotels.
Ayala Land by 2020 aims to secure 50 percent of total revenues from recurring business and the other half from residential sales.
Ayala Land plans to achieve the target by tripling the size of shopping malls to 3.6 million square meters, office space to 1.8 million sq. m. of gross leasable area and hotel and resorts to 6,000 room keys.
Share price of Ayala Land on Friday declined 1.4 percent to P32.05, while POPI fell 7.4 percent to P2.01.