Ortigas family nixes SM offer, partners with Ayala
The Ortigas family has exercised its right of first refusal over British banking giant HSBC’s 34-percent stake in Ortigas Holdings Inc., dealing a major blow to the Sy family’s plan to take over the firm that owns the 16-hectare Greenhills shopping complex.
Ayala Land Inc. (ALI) announced yesterday a strategic alliance with the group led by Ignacio R. Ortigas, allowing it to participate in the development of various properties owned by the Ortigas group.
The Ortigas family has matched the SM Group’s offer to acquire HSBC’s stake, reportedly amounting to P11 billion.
SM Investments Corp. confirmed the transaction.
“We were informed that the existing shareholders of Ortigas Holdings, which consist mainly of the Ortigas family, exercised their right of first refusal on the shares owned by HSBC,” SMIC said.
The SM Group was initially hoping to finalize a deal to take over the property holding firm of the Ortigas family in the first half this year.
In April, SMIC said it was getting nearer to its bid to acquire a controlling stake in Ortigas Holdings, pointing out financing was ready and that it was just waiting for final instructions.
The deal would have allowed the SM Group to corner the lion’s share of the retail market in the burgeoning Ortigas-Pasig-Mandaluyong area.
ALI said it would allocate an initial amount of P15 billion for this purpose. The development project will include plans for residential, office, retail, and hotel components.
ALI said the partnership in line with the group’s strategy, which includes expanding its operations in key growth centers in Metro Manila. ALI intends to contribute its expertise in building large scale, mixed-use developments to this partnership.
The strategic alliance is expected to generate significant synergies with the other ALI integrated mixed-use communities in key business districts such as Makati, Bonifacio Global City and Quezon City.
“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,” said ALI president Antonino T. Aquino. “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.”
Ortigas & Co. currently owns strategic land bank areas in the Ortigas Business District, Greenhills Shopping Center, Tiendesitas in Frontera Verde, Circulo Verde and Capitol Commons.
The Ortigas district, which encompasses at least 100 hectares, is home to many shopping malls like Robinsons Galleria, Shangrila, Megamall, Podium and St. Francis Square.
Megamall, developed and operated by
shopping mall giant SM Prime Holdings Inc., sits on 18 hectares of prime land with a total floor area of about 348,000 square meters. It is currently undergoing renovation and expansion with the three- hectare parking lot in front of EDSA being converted into a commercial and office space for business process outsourcing companies.
The expansion will give Megamall an additional 100,000 sqm of gross leasable area and will make it the largest shopping mall in the country, topping SM City North Edsa.
The Ortigases, whose historic roots date back to the 300-year Spanish colonial rule, are among the largest landowners in the country. They developed upscale residential subdivisions Valle Verde and Wack-Wack as well as the 77-unit Luntala townhouse project within Valle Verde 6.