Conglomerate Ayala Corp. said it repurchased 3.8 million company shares from Japan’s Mitsubishi Corp., its second largest shareholder, at P838 apiece valued at P3.19 billion.
Ayala said in a disclosure to the stock exchange the purchase of the company’s common shares from Mitsubishi was in line with the share buyback program previous approved by the board.
“At current levels of our stock price is quite undervalued and this buyback of our shares will benefit all existing shareholder,” said Ayala chief finance officer Jose Teodoro Limcaoco said.
“We have our relationship with Mitsubishi which remains as our second largest shareholder. This transaction I understand is part of Mitsubishi’s portfolio rebalancing exercise with regard to their Ayala holdings, which now stands and remain at around six percent,” Limcaoco added.
Share price of Ayala on Wednesday rose to as high as P902.50 before closing at P901.50, up 6.1 percent from the previous day’s P850.
The latest transaction is the third rebalancing and portfolio management exercise conducted by Mitsubishi on its Ayala holdings.
The Japanese in March last year unloaded 8.5 million Ayala shares, or equivalent to a 1.4-percent stake in the conglomerate, for nearly P8 billion.
It sold another 12 million Ayala common shares in January at P900 each to raise P11.7 billion.
Ayala, which has interests in banking, real estate, telecommunications, power generation, water utility, infrastructure and education, is aggressively expanding its core businesses as well as new ones, including logistics, healthcare, power generation and manufacturing.
The conglomerate has earmarked ₱262 billion in combined capital expenditure this year.
It allotted the bulk of the amount Ayala Land Inc. and Globe Telecom Inc., which in turn earmarked ₱130 billion and ₱63 billion in capital expenditure, respectively.
The parent company programmed ₱22.6 billion in capital spending primarily to bankroll the growth initiatives of AC Energy Inc., AC Infrastructure Holdings Corp. and AC Healthcare Holdings Inc.
Ayala reported a net income of ₱8 billion in the first quarter of 2019, up five percent year-on-year.