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MANILA, Philippines [UPDATED] – Two of the biggest retail mall players in the country are in discussion for an acquisition deal, disclosure to the stock exchange showed.
In a statement to the exchange on Thursday, February 9, the SM Group, which operates the widest mall network in the country, admitted they are in talks for a possible deal with the Ortigas group.
“We confirm that SM Group is in the process of discussion for the acquisition of majority interest in Ortigas Holdings Inc.,” said SM Investments Inc VP for Finance Teresita Cecilia Reyes in the disclosure.
“The amount and details of the transaction are still under discussion and subject to finalization.” she added.
The Philippine Daily Inquirer previously reported that the deal may be worth $1 billion.
The SM Group operates at least 3 of the world’s biggest malls. It has stakes in banking (Banco de Oro), real estate (SM Development Corp), gaming and entertainment (Belle Corp), among others.
Its patriarch, Henry Sy, is the richest man in the Philippines, according to Forbes magazine.
On the other hand, the Ortigas group, which has a business center in the metropolis named after them, has a vast landbank in Metro Manila, spanning Pasig, Mandaluyong and San Juan cities.
It has partnerships with global banking group HSBC, which had once considered selling its stakes in Ortigas & Co. to, among others, the Gokongwei group, which controls Robinsons Land, and the Ayala Group, itself a mall operator and currently the country’s biggest real estate player.
The Sys had also expressed interest to acquire a stake in the Ortigas group then, but did not pursue it.
The Ortigases, who are of Spanish descent, operates Greenhills Shopping Mall, which sits on a 16.5-hectare land and one of the oldest malls in the metropolis. Greenhills has been distinct for opening its doors to Muslim vendors who sell items like pearls, marking Ortigas a must-go-to for tourists on a shopping spree.
After failing to enter into a deal with suitors like the Gokongweis and the Ayalas in the early 2000’s, the Ortigas group decided to establish Tiendesitas, an open-air retail area with anchor tenants like SM, and Frontera Verde, a residential development at a sprawling 18.5-hectare landbank in Ortigas area. – Rappler.com