Ayala Corp sells P8B stake in GCash parent to Mitsubishi

According to a report by InsiderPH, Ayala Corp. [AC 717.50, down 1.7%; 30% avgVol] is selling half of its stake in AC Ventures (ACV) to Mitsubishi for P18 billion, in a deal that values GCash at approximately P288 billion (~$5 billion).  ACV owns a stake in Globe Fintech Solutions (Mynt), which in turn owns GCash. This deal is apparently a continuation of the July transaction where MUFG acquired an 8% stake in Mynt for $393 million; it was conducted on the same valuation terms. According to InsiderPH, Ayala will use the proceeds of the sale to “retire loans it took to finance AC Ventures’ stake that matched MUFG’s entry in GCash last July.”     

MB bottom-line: At that valuation level, GCash is worth about as much as Chinabank [CBC 60.15, down 0.1%; 11% avgVol] and UnionBank [UBP 41.60, down 3.0%; 107% avgVol] -- combined. GCash is a beast, but one that all involved have been very careful to slow-walk to market. We’ve been teased with an imminent GCash IPO for years now, and hyped up by public musings of a potential twin listing (here and in a foreign market). Mostly, though, everyone involved seems committed to growing and protecting GCash’s valuation. Each successive transaction establishes a new, higher, valuation floor for that Maybe Next Year IPO. Well, not this transaction: it’s at the same valuation as the last one, but you can feel the desire to protect the valuation in the insistence that this was just a delayed “continuation” of the previous transaction as a way to explain why the valuation has not grown in the intervening three months. It’s inevitable that GCash will grow and prosper; the big question now is more about how much of that growth we’ll be allowed to own for ourselves.

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