Makati Sports Club to split land for P5 B, 50-story Ayala condo
The Makati Sports Club plans to sell over half of the 1.3-hectare complex for P5 billion, and use the proceeds to build a new clubhouse on the remaining half of the Salcedo Village compound.
According to the proxy being solicited by club officials Robin King and Alicia Cinco, a total of 7,000 square meter will be lopped off and sold for a “minimum amount of P5 billion,” where preferred buyer Ayala Land would build a residential-commercial condo with a FAR ratio of 16x.
With that floor-to-area ratio, the planned building would have a maximum floor space of 11.2 hectares, which would be similar to the nearby 55-story PBCom Tower with a gross floor area of 11.9 hectares built on a smaller floor plate of 1,440 sqm.
“The turnover of the 7,000sqm property to the buyer will be made only after the new clubhouse and facilities are built and become operational,” the proxy statement said.
Apparently the plan is to keep the main clubhouse open for business, while the new clubhouse is being constructed on the present tennis and squash courts.
Incorporated in 1975 initially as an Ayala project, Makati Sports last year reported a net income of P4.3 million, but without any large savings or planned capital contributions from its 1,500 proprietary members to fund the redevelopment of its over four-decade-old building.
Based on the club’s internal valuation, the entire 1.3-hectare complex could arguably fetch P10 billion, which should translate to about P6.6 million windfall for each shareholder.
No wonder the share price has zoomed from P480,000 last year to P680,000 early this year, with no seller even at the latest bid of P900,000.
According to the grapevine, among the possible sweeteners to obtain the minimum 2/3 shareholders approval during the Aug. 31 special meeting is a preferential purchase and installment package with Ayala Land on the planned condo.
Coffee Bean gives Jollibee the shakes
The acquisition of the money-losing Coffee Bean and Tea Leaf global chain is giving Jollibee share price the proverbial shake, and is even dragging the Philippine Stock Exchange deeper into the bear market.
After sliding by nearly eight percent on Wednesday’s announcement, Jollibee sunk by nearly six percent to P236.40 by Thursday noon, even with the disclosure that Jollibee director Antonio Chua Poe Eng bought 28,000 shares at P266 to P270 to catch what traders call a falling knife.
“There is market skepticism that this purchase will be earnings accretive considering Coffee Bean’s 2018 loss is about 12 percent of Jollibee’s profit last year,” Rachelle Cruz, an analyst at AP Securities, told Bloomberg.
“Smashburger is yet to contribute positively to earnings and here is another acquisition that will probably be earnings dilutive in the next two to three years,” she said, referring to the US burger chain Jollibee took over in 2018.
What is adding to the negative sentiment is that Jollibee would be using partly borrowed funds to acquire the loss-making Coffee Bean chain for $350 million.
Just late last month, Jollibee chief finance officer Ysmael Baysa told reporters that the country’s largest fast-food chain would be borrowing 30 percent of the P17.2-billion in capital expenditures for the year.
The Coffee Bean acquisition is Jollibee’s largest to date, following its $210.25 million takeover of American fastfood chain Smashburger, according to Bloomberg data.
The transaction will boost contributions from international businesses to 36 percent of total sales and closer to Jollibee’s goal of becoming one of the top five restaurant companies in the world in terms of market capitalization.
Heard through the grapevine
Malaysian conglomerate MTD has moved closer to collecting on its P750-million claim against Calamba City over their botched joint venture project, a regional center for the Calabarzon provinces.
Besides upholding the MTD claim, the Court of Appeals even added the unspecified arbitration costs incurred by a three-man panel headed by semi-retired lawyer Victor Lazatin.