SHOEMART Inc., the main property arm of the Sy Group, is allotting as much as P5.1 billion for the acquisition of shares held by public investors in listed SM Development Corp. (SMDC), which invests in residential development.

The company has to make the tender offer following its move to acquire the 48.6-percent stake of SM Investments Corp. (SMIC) in SMDC in exchange for new shares in Shoemart. The transaction will further raise Shoemart’s equity in SMDC from 15.6 percent to 64.2 percent, effectively making it the controlling shareholder in SMDC.

“Shoemart will have a resulting ownership of more than 51 percent in SMDC and that triggered the tender offer which is mandated under the Securities Regulation Code,” said SMIC executive vice president and chief financial officer Jose T. Sio in a press briefing Tuesday.

A SECURITY officer stands guard at the SM Mall of Asia, one of the many Philippine malls subsumed under the group of tycoon Henry Sy. Shoemart Inc., the group’s main property unit, is allotting as much as P5.1 billion for the acquisition of shares held by public investors in listed SM Development Corp. (SMDC), which invests in residential development. --NONIE REYES

In the case of SMDC, the tender offer covers around 35.8 percent or 1.3 billion shares owned by the Sy family and the public investors.

Sio said if all the owners of the 1.3 billion shares will avail themselves of the tender offer, Shoemart will shell out P5.1 billion to buy the shares at P3.95 each. A tender offer is a public offer made to the shareholders of a company by a potential acquirer to purchase their stock at a price much higher than the current market value of the stock.

“However, we are certain that the Sy family will not sell its collective 20-percent stake in SMDC so we are taking them out of the equation. The remaining 15 percent, if they avail themselves of the tender offer, will amount to P2.5 billion,” he explained.

Sio emphasized the transaction is a step forward to consolidate all of SMIC’s property development businesses under Shoemart.

After SMDC, the plan is to also put the group’s eco-tourism development Hamilo Coast under Shoemart Inc. as well as the property assets of another listed property unit Highlands Prime.

Meanwhile, SMIC president Harley Sy said they have no plans to list Shoemart.

“There’s no intention yet for an IPO. We just want to make it simpler for everybody to understand. We are confident also that by doing this move, the value of the property assets will appreciate more,” he said.

THE Development Bank of the Philippines (DBP) has expanded the coverage of its hedging facility to include overseas Filipino workers (OFWs).

Local stocks fall on high oil costs

PHILIPPINE stocks fell the most in a week on higher oil prices and renewed concern over the US housing slump after Citigroup Inc. said defaults may worsen in the world’s biggest economy.

THE Philippine peso fell from near a seven-year high against the dollar as renewed concern about the US housing market prompted investors to cut holdings of emerging-market assets. Government bonds fell.

SHOEMART Inc., the main property arm of the Sy Group, is allotting as much as P5.1 billion for the acquisition of shares held by public investors in listed SM Development Corp. (SMDC), which invests in residential development.

SMART Broadband Inc. (SBI), the wireless broadband unit of Smart Communications Inc., is acquiring some assets of Mindano-based Cruz Telephone Co. Inc. (Cruztelco).

A CONVERTIBLE share is that kind of share which is changeable by the shareholder from one class to another class at a certain price and within a certain period (De Leon, The Corporation Code of the Philippines, Annotated, 2002 Ed., p. 83). It can be said also that this is tantamount to a right to convert stock into a new kind of stock given to the stockholder by the contract under which he acquires the said stock (In re Phoenix Hotel Co. of Lexington, Ky., 83 F2d 724, affg 13 F Supp 229).