Real estate talk

When Metro Pacific Investments Corp. (MPIC) announced that it wants to acquire AB Holdings Corp.’s stake in Landco Pacific Corp., many wondered what would happen to this gem of a real estate development company, responsible for the highly successful Punta Fuego resort project in Batangas among other endeavors.

Latest news is that MPIC has agreed to extend AB Holdings’ call option to Nov. 10 this year. The extension was due to the delay in finalizing the review of Landco’s valuation, being conducted by a third party.

The book value of MPIC has been placed at about P1.32 billion, but the revaluation is expected to yield a higher amount.

The situation is that, either MPIC buys out AB Holdings from Landco, or AB Holdings buys out the former. Right now, AB has a 49-percent stake in Landco, with the remainder held by MPIC.

MPIC is offering to buy out AB’s 39-percent stake, leaving the latter with 10 percent. This will raise MPIC’s shareholdings in the company to 90 percent.

Sources revealed that while AB Holdings is more or less resigned to the fact that it will sell its stake to MPIC, but who knows? It might still change its mind, especially now that talks with prospective partners for a buyout of MPIC’s stake are going very well.

MPIC wants to raise its stake in Landco for one good reason. It wants to make Landco a big name in the real estate business. It will very difficult for MPIC to justify putting in billions of pesos in funds to convert Landco into a real estate giant if it only owns 51 percent of the company.

Whether Landco ends up being controlled by MPIC or by AB Holdings, the company will definitely be seeing a brighter future.

Investing in healthcare

Speaking of MPIC, the company is really bent on making it big in the healthcare business.

MPIC chairman Manny Pangilinan tells us that he has his eye on another hospital to acquire. The hospital is located in Metro Manila.

But he says the acquisition will have to be made next year, as MPIC has completed its quota of acquisitions this year.

Early last year, MPIC made an investment in Medical Doctors Inc., owner and operator of Makati Medical Center – a 582-bed, full service medical facility through a subscription of P750 million in convertible Notes, making MPIC the largest shareholder as it gained a 33 -percent interest in MDI. 

It seemed to be a very sound move. From reporting profits of P15 million in 2005, Makati Medical surpassed its record profits of P223 million in 2006 to P268 million in 2007, reflecting a 20-percent improvement from the previous year.

Metro Pacific then announced its plan of establishing the first nationwide chain of hospitals in the Philippines.

The second step towards the expansion of MPIC’s healthcare portfolio was announced in May 2008 with the acquisition of 34 percent of Davao Doctors Hospital (Clinica Hilario) Inc. for approximately P498 million, making MPIC the single largest shareholder of DDH. 

Considered the best medical facility in Mindanao, DDH also owns Davao Doctors College, Inc., now a leading center of academic excellence in nursing, radiologic technology, physical therapy, optometry, hotel and restaurant management and general education.

In July of 2008, Colinas Verdes Hospital Management Corp., a wholly owned subsidiary of MDI entered into an agreement to manage and operate the Cardinal Santos Medical Center on behalf of the Roman Catholic Archbishop of Manila for an interim period of six months until the long term operator is selected by the RCAM.

CSMC is a 212-bed tertiary hospital situated in a three-hectare property along Wilson Street, San Juan City. The hospital land, buildings and equipment are owned by the RCAM.

Improving the quality of healthcare in the country is definitely a very laudable move.

Let’s hope that next time, our legislators can look at the possibility of making HMO membership more affordable to Filipinos. Better if we can make it mandatory among employers to provide HMO services to their employees, aside from Philhealth membership. This will be a big boost to everyone, and of course to the hospital business and pharmaceuticals.

From the grapevine

Prudential Guarantee’s Robert Coyuito seems to be all over the papers these days, announcing the P7.5 billion settlement in favor of the families of the 110 victims of the Air Philippines flight 541 that crashed in Samal Island, Davao eight years ago. Some people wonder why, since Prudential Guarantee reportedly never shelled out even a single centavo in that settlement. It was aircraft lessor, AAR Aircraft and Engine Group, that made settlement, and only after the claimants waged a bitter battle in the US courts. In fact, neither Prudential Guarantee nor Coyuito had anything to do with the generous settlement, coffeeshop habitués opine. Prudential provided only minimum insurance benefits years ago to the victims, and it would surprise many in the business community if Prudential even paid a minimal amount to all 110 families, especially since word in the grapevine is that Prudential has been disaccredited by several banks. Let’s hope of course that this is plain rumor.

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