MITSUBISHI Corp. on Monday was set to significantly increase its investment in Ayala Corp. through a transaction valued at about P44.5 billion, strengthening the Japanese trading house’s position as a strategic shareholder of one of the Philippines’ largest conglomerates.
Ayala said it expects to receive about P20 billion in proceeds from the transaction.
The conglomerate plans to use the funds to strengthen its balance sheet through debt reduction, continue its share purchase program covering Ayala and its listed subsidiaries, and support future growth initiatives.
“This transaction represents much more than a capital investment,” Ayala Chairman Jaime Augusto Zobel de Ayala said.
“It reflects the strength of a relationship built over many years and a deep alignment in values, long-term thinking, and responsible business stewardship,” he added.
Juan Paolo Colet, managing director of China Bank Capital Corp., described the transaction as a “solid vote of confidence” in Ayala, noting that the structure would provide fresh capital to the conglomerate while also giving public shareholders an opportunity to sell some of their shares at a premium.
“It’s a solid vote of confidence in Ayala Corp. The deal is well-structured as it not only infuses cash into the company, but also gives public shareholders an opportunity to sell some shares at a premium,” Colet said.
Under a definitive agreement announced by Ayala, Mitsubishi’s economic ownership in Ayala will increase from 4.7 percent to 15 percent, while its voting stake will rise to 20 percent.
The transaction is priced at P650 per Ayala common share and will involve a combination of primary and secondary shares, including a voluntary tender offer.
As part of the transaction, Ayala intends to conduct a voluntary tender offer for up to approximately 30 million common shares on behalf of Mitsubishi, subject to applicable regulatory requirements.
The tender offer will give public shareholders an opportunity to participate in the transaction at the same P650-per-share price agreed with Mitsubishi.
Given Ayala’s high public float and Mitsubishi’s target stake, Colet said the transaction does not pose a delisting risk.
“We very rarely see these kinds of tender offers among the top blue chips. It’s a welcome development for investors amidst the low valuations of many index stocks,” he added.
Meanwhile, Ayala President and CEO Cezar Consing said the investment would build on the companies’ 52-year relationship.
“Mitsubishi’s increased investment in Ayala Corp. is designed to grow value for Ayala’s shareholders by combining global reach and technology of one of Japan’s leading trading houses with the assets of one of the Philippines’ most diversified conglomerates,” Consing noted.
“This is about turbocharging a 52-year relationship to benefit our various stakeholders,” Consing added.
The transaction also provides for a possible expansion of Ayala’s board from seven to nine members, subject to the required shareholder and regulatory approvals for proposed amendments to the company’s Articles of Incorporation.
The transaction remains subject to conditions precedent, closing conditions and applicable regulatory approvals.
Shares of the company rose P26.00 or 5.13 percent, to close at P533.00 each.
