The Securities and Exchange Commission approved the plan of the Sy family to consolidate all retail businesses under SM Retail Inc.
SM Investments Corp., the holding company of tycoon Henry Sy, said in a disclosure to the stock exchange the corporate regular approved the merger of SM Retail with other retail subsidiaries and affiliates, including Forsyth Equity Holdings Inc., HFS Corp., Morrison Corp., San Mateo Bros. Inc. and Tangiers Resources Corp. SM Retail is the surviving corporation.
“The merger is seen to be both value and earnings accretive given the stores’ competitive position, synergies with SM Supermalls and strong growth potential,” SM Investments said.
Under the plan, over 1,300 retail outlets will be folded into SM Retail in exchange for shares of stock in SM Retail’s expanded net assets.
The merger will include SM Retail’s food and department stores, leading local brands Ace Hardware, Watsons, Toy Kingdom, SM Appliances, Our Home, Baby Company, Kultura, Sports Central, Pet Express and other specialty retailers.
Macquarie Capital was the appointed advisor of SM Investments for the merger.
SM Investments earlier said the consolidation would boost total revenues of the retail group to P251 billion, up 16.7 percent from P215 billion before the merger.
SM Investments will hold 77.3 percent interest in SM Retail after the merger, while the Sy family will continue to own 22.7 percent.
Aside from higher revenues, the combined entity will have 1,927 outlets and 2.4 million square meters of gross floor area across a diverse portfolio of food, household appliances, DIY, furniture, apparel, footwear, pharmaceuticals/cosmetics and specialty retailing stores.
Meanwhile, property developer SM Prime Holdings Inc. set the interest rate for its P10-billion, 10-year fixed rate bonds at 4.2005 percent on strong demand for investors.
SM Prime said in a disclosure to the stock exchange the offer period for the bond offering would be on July 13 to 19, 2016. The retail bonds will be issued and listed with the Philippine Dealing & Exchange Corp on July 26.
“The retail bond to be issued will sustain SM Prime’s development roadmap, which is geared towards provincial expansions mostly allotted on malls and offices developments. We remain optimistic on the huge growth potential in the provinces where large areas remain unserved,” SM Prime president Hans Sy said.
SM Prime bonds’ joint issue managers, joint lead underwriters and joint bookrunners are BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp. and First Metro Investment Corp.
East West Banking Corp., PNB Capital and Investment Corp. and United Coconut Planters Bank are participating underwriters for the bond issue.