Ayala Land, a Philippine property developer, has raised Ps13.6 billion ($323 million) from a top-up placement, which it plans to use for acquisitions of properties and assets. The bookbuilding was launched after the market closed in the Philippines on Tuesday and the deal was completed late that evening, a source said yesterday.
The deal went ahead after Ayala Land’s executive committee approved the placement of 680 million common shares at a price of Ps20 a share and the issuance of an equal number of new Ayala Land shares at the same price. It noted that Ayala Corporation was the seller of the placement and the subscriber of the subscription tranche in the top-up placement. Before the transaction, Ayala Corp owned about 53% of Ayala Land.
The initial deal size comprised 530 million shares of Ayala Land for a price ranging between Ps19.8 and Ps20.2 each, which translated into a discount of 4% to 5.9% versus Tuesday’s close of Ps21.05. That could have raised up to about $255 million.
But due to strong demand, the company decided to increase the size of the deal to 680 million shares, the source said, which is about 28% bigger than the original size and represents about 5% of the company’s enlarged capital. The price was fixed at the mid-point of the price range at Ps20, a discount of 5%.
At $323 million, it is the Philippines’ biggest overnight follow-on transaction, excluding rights offers, according to Dealogic. Indeed, it is the biggest such deal since PCI Bank’s $277 million transaction in 1996, according to the data.
Ayala Land’s stock fell 1.9% to end yesterday’s trading at Ps20.65, holding above the final price. The stock has climbed 37% since the start of the year, outperforming a rise of about 20% on the benchmark stock index during the same period.
The deal had strong anchor support from long-only investors, sovereign wealth funds and sector specialists, and about a third of the deal was already anchored at launch, the source said. Demand came from the Philippines as well as offshore; from Asia followed by Europe and the US, the person noted.
Even after the deal size was increased, the book was more than twice covered, the source said. A variety of factors such as the high-quality issuer, a lot of interest in the Philippines and growth prospects for the business likely contributed to the robust demand, the person said.
Ayala Land said the purpose of the transaction was “to raise funds to acquire properties or assets needed for the business of the corporation”.
In addition to the company’s previously announced Ps37 billion capital expenditure programme for 2012, it has identified opportunities to add to its land bank, which amount to about Ps36 billion during the next two to three years, Ayala Land said in the statement. About Ps20 billion of this may be deployed in Makati City and other parts of Metro Manila, and the rest in growth centres in Nuvali and other parts of Luzon, and in the Visayas and Mindanao, it said.
In the first quarter ended on March 31, Ayala Land’s consolidated revenues rose 17% to Ps12.4 billion from the same period a year earlier, and net income grew 31% to Ps2.1 billion. Revenues from real estate and hotels increased 18% to Ps11.8 billion, comprising the bulk of consolidate revenues, the company said in its earnings statement.
Goldman Sachs, J.P. Morgan and UBS were joint bookrunners and placement agents for the deal, while BPI Capital was the sole domestic coordinator and bookrunner and CLSA was co-manager, according to Ayala Land.
Another Philippine deal was in the market last night. Shareholders in Puregold Price Club were offering about 220 million shares in the Philippine supermarket chain to raise up to Ps5.9 billion ($141 million), according to a term sheet.
The transaction was marketed at a price ranging between Ps26 and Ps27 each, which represents a discount of about 5% to 8.5% versus Wednesday’s close of Ps28.4. The price range indicated that the deal could raise between $136 million and $141 million.
The selling shareholders were Lucio Co, the company’s chairman, and Susan Co, the vice chairman. The offering size accounted for about 8% of the company’s shares outstanding, based on data on the Philippine stock exchange’s website.
Since its listing debut in October last year, Puregold’s stock has almost tripled to date, from around Ps11 to around Ps28.
UBS was the sole bookrunner for the deal.