Shoemart offers to buy 35% stake in SMDC worth P5B

Shoemart Inc., the newly-designated corporate vehicle for all real estate projects of the SM Group of retail tycoon Henry Sy, is offering to buy the remaining 35 percent shares held by minority shareholders in SM Development Corp. (SMDC) worth around P5 billion.

The tender offer follows the share-swap undertaken by SM Investments Corp. (SMIC), the flagship holding firm of the Sy family, and Shoemart, which would result in the latter owning 65 percent of SMDC.

The share swap forms part of SM’s reorganization plan, aimed at simplifying the organization structure and enhancing operational efficiency of its real estate development group.

Under the plan, SMIC will transfer 1.52 billion shares of its stock in SMDC in exchange for 385,000 Shoemart shares which will comprise the paid up capital for SMIC’s 25 percent subscription in the increase in capitalization of Shoemart Inc. to P1 billion.

 SMIC chief financial officer Jose Sio said the group has no plans of delisting SMDC, which will continue to be the group’s residential development unit.

Sio added there are no plans to list Shoemart in the near future. “We have no intentions of listing it today or in the near future.”

He said the group is prepared to buy all the remaining shares to be tendered by shareholders but expects only half of the 35 percent to avail of the offer.

The tender offer price has been pegged at P3.95 per share.

Other companies or real estate assets expected to be folded into Shoemart include Highlands Prime Inc., the SM Group’s upscale property development firm, and Hacienda Looc in Nasugbu, Batangas, the group’s first resort tourism project.

The tourism project, dubbed Hamilo Coast, is envisioned to become a world-class integrated resort community.

Sio said Shoemart is seeking to secure leadership across four major real estate sectorswhich include residential and condominium development, commercial development, leisure and tourism and hotel investment.

SMIC executive director Gregory Domingo said the group has a landbank of over 7,000 hectares across the country which it plans to develop to capitalize on the booming property sector, robust remittances from overseas Filipino workers, and the rising number of tourists.