SM garners most innovative deal award for property merger

MANILA, Philippines - SM Investments Corp. (SMIC) garnered the “Most Innovative Deal” Award from financial magazine Alpha Southeast Asia for the merger of its property assets.

According to Siddiq Bazarwala, publisher at Alpha Southeast Asiamagazine “In line with SMIC’s vision to create a leading and integrated real estate company in Asia, the company embarked on a highly transformational transaction to consolidate all of its real estate interests under its SMIC subsidiary and the Philippine Stock Exchange (PSE) listed SM Prime Holdings Inc. (SM Prime) in May 2013.

Plans for the consolidation of SM Investments’ property-related businesses under SM Prime were first announced on May 31 of this year involving a series of steps which included tender offers leading to the delisting of SM Development Corp. and Highlands Prime Inc.; the merger of SM Land Inc. (SM Land) with SM Prime through a share-for-share swap; and the acquisition by SM Prime of certain real estate companies and assets held by SM Investments in exchange for new shares in SM Prime. These transactions were subsequently approved by the Securities and Exchange Commission last Oct. 10.

Alpha Southeast Asia further said “the tender offers were a milestone in the reinvigorated equity markets of the Philippines, where for the first time, simultaneous tender offers for two PSE-listed companies were undertaken by a single purchaser, SM Land, and paid for with PSE-listed shares of another company, SM Prime, instead of the typical cash-for-shares consideration in a tender offer.”

Furthermore, the SM Prime shares offered as consideration provided tendering shareholders a mechanism to directly migrate their stakeholdings to the entity, SM Prime, which now serves as the Group’s flagship real estate entity subsequent to the entire consolidation exercise.”

Bazarwala added that the domestic merger has therefore helped SMIC increase synergies and organizational efficiencies among the various real estate business units, and will no doubt further enhance the value of its real estate businesses in the Philippines.