June 03, 2013

SM Group merges real estate businesses

SM Investments Corp. (SMIC) has finalized the merger of its real estate businesses. The transaction will involve several steps. First, private firm SM Land Inc. will acquire upscale developer Highlands Prime Inc. (HPI) and residential builder SM Development Corp. (SMDC) in exchange for shares in SM Prime Holdings Inc.

SMDC shareholders will receive 0.472 SM Prime share for each SMDC stock while HPI stockholders will get 0.135 SM Prime share for every HPI stock. Both SMDC and HPI will exit the local bourse.

Next is the merger of SM Land with SM Prime, which will be the surviving entity. SM Prime will also acquire assets like the SM Mall of Asia complex, Pico de Loro, and SM Hotels and Conventions Corp. currently held by SMIC.

The transformed SM Prime will have P284 B in current assets from P148 B, revenues of P58.4 B from P30.7 B, net income of P17 B from P10.9 B and a total landbank to 920 hectares from 110 hectares. SM Prime’s market capitalization will hit at least $14B. - WealthSec