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MANILA, Philippines – The SM Group, led by the Philippines richest man Henry Sy, was blocked from its attempt to acquire a 34% stake in one of the oldest landlords of Manila, Ortigas & Co Limited Partnership Holdings Inc (OHI).
Closing the deal would have given Sy’s SM Group a major share in the Ortigas family’s crown jewel, the Greenhills shopping center, and their vast properties spanning Mandaluyong, San Juan and Quezon City.
Thanks to the right of first refusal, the Ortigas family was able to retain control of their property holding firm and buy the shares held by Hongkong and Shanghai Banking Corp.’s (HSBC).
In a disclosure to the Philippine Stock Exchange on Friday, June 29, SM Investments Corp said “We were informed that the existing stockholders of Ortigas Holdings Inc, which consist mainly of the Ortigas family, exercised their right of first refusal on OHI shares owned by Hongkong and Shanghai Banking Corp.”
Company Director Jaime M. Ortigas told BusinessWorld, HSBC sold its entire 34% stake for “something worth like P11 billion.”
Partnering with Zobels instead
Despite the SM Group’s keen interest to get into Mandaluyong’s central business district for the past few years, the Ortigas family opted to parner with Ayala Land Inc for development of their Ortigas properties.
The same day SM informed the PSE of its failed bid, rival developer Ayala Land of the Zobel family announced its own strategic alliance with the Ortigases to develop key growth centers in Metro Manila.
Analysts had said if SM sealed the deal it would have been a “game-changer” that would have swelled their land bank to the size of Ayala Land’s.
Now, Ayala Land is the Ortigases’ group of choice and has agreed to enter the partnership at the latter’s invitation. ALI will make an initial investment of P15 billion to help develop residential, office, retail and hotel components in various properties owned by the Ortigas group.
According to OHI’s website, the growing urban center of Mandaluyong was known as Hacienda de Mandaloyon when it was acquired by the Ortigases in the mid 1900s. The vast property was then a “virtual wasteland” but has since transformed into skyline of highrises with growing commercial and industrial businesses.
For his part, Ayala Land CEO and President Antonino T. Aquino said in a statement, “We are privileged to be a part of this strategic alliance. We welcome the opportunity to participate in the development of these key areas in Metro Manila.”
“Many of our successful developments such as the Ayala Alabang, Cebu Park District, Bonifacio Global City, Trinoma, Nuvali, Abreeza Davao, and Centrio Cagayan de Oro were built on strong partnerships with various groups,” he added.
Ayala Land said it will contribute its expertise in building large scale developments and that the strategic alliance will be able to benefit from synergies with ALI’s other integrated mixed-use communities in key business districts such as Makati, Bonifacio Global City, and Quezon City. – Rappler.com