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AGI, Megaworld agree on P10.43-B exchange of Travellers, GERI shares

Andrew Tan’s flagship Alliance Global Group Inc. (AGI) is swapping its stake in leisure developer Global-Estate Resorts Inc. (GERI) for part of the equity interest of subsidiary Megaworld Corporation in Travellers International Hotel Group Inc. worth P10.43 billion.

Based on disclosures to the Philippine Stock Exchange by the two firms, AGI has acquired from Megaworld 1.12 billion Travellers common shares at a price of P9.27 per share. The shares were crossed through the facilities of the PSE.

“The sale of its shares in Travellers will enable Megaworld to focus on the real estate business while allowing AGI to benefit from the projected growth of Travellers through the expansion of its hotel, retail and gaming facilities,” AGI and Megaworld said.

At the sidelines of Megaworld annual meeting, Megaworld executive director Kingson Sian said the sale of the firm’s stake in Travellers translated to an P8.27 per share windfall since the shares were bought at their par value of one peso in 2008.

“Megaworld shareholders invested in Travellers at P1 and they sold it at P9.27. That’s great increase five years,” said Sian adding that Megaworld acquired a 10 percent stake in Travellers through a property (Newport City lot) for equity swap.

Megaworld’s stake was diluted to 9 percent after Travellers’ initial public offering last year. Sian the shares sold to AGI are equivalent to 6 percent of Travellers, leaving Megaworld with a 3 percent stake worth about P3 billion.

Meanwhile, AGI sold to Megaworld its 49.20 percent stake in GERI consisting of 5.41 billion common shares also for P10.43 billion, or a price of P1.93 per share.

Megaworld also completed the acquisition of 597.94 million GERI shares through a tender offer which were also crossed through the facilities of the PSE. After the acquisitions, Megaworld now owns 8.83 billion GERI shares or about 80.40 percent of GERI.

“Megaworld’s acquisition of GERI signals our official entry to the country’s tourism industry. We will be bringing the 25-year expertise of Megaworld in mixed-use developments which we call ‘townships’ to the projects of GERI,” said Megaworld chairman Dr. Andrew L. Tan.

With the majority acquisition of GERI, Megaworld has added around 3,000 hectares to its land bank and ownership of vast properties in Tagaytay, Alabang, Iloilo, Cagayan de Oro and Boracay.

Megaworld now has close to 4,000 hectares of land in its portfolio, cementing the company’s leadership as the Philippines’ real estate giant.

“Megaworld will take an active role in the masterplanning and conceptualization of these townships. Just as what we have done for Megaworld projects, we will also incorporate our pioneering LIVE-WORK-PLAY-LEARN concepts and international inspirations into these developments with special focus on tourism,” said Megaworld senior vice president Jericho Go.

Aside from GERI, Megaworld wholly owns Suntrust Properties, Inc. and majority of Empire East Land Holdings, Inc.

The consolidation of all real estate businesses of Dr. Tan under the Megaworld brand enables the company to capitalize on real estate opportunities and to capture the expected growth momentum of its real estate affiliates.