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Alliance Global to hike Megaworld stake

Posted on May 24, 2013 07:42:07 PM [ BusinessWorld Online ]
ALLIANCE GLOBAL Group, Inc. has moved to hike its stake in Megaworld Corp. at a premium to boost the developer’s stock price, Alliance Global said in a disclosure on Friday.
“The board of directors of Alliance Global Group authorized the subscription by the company to 2.5 billion common shares of Megaworld to be issued from a proposed P10-billion increase in Megaworld’s capital stock,” the company said.
The shares will be bought at P4.29 per share or P10.725 billion in total. The purchase price is a 5% premium over Megaworld’s 30-day volume weighted average price, Alliance Global said.
A quarter of the subscription price shall be paid during the signing of the subscription agreement, while the balance shall be paid upon the approval of the Securities and Exchange Commission.
“Alliance Global sees Megaworld stock as undervalued and remains confident that the real estate market will continue to expand due to strong demand fuelled by a robust Philippine economy,” the firm said.
As of end-March, Alliance Global owns 11.59 billion shares or 39.53% of Megaworld’s 29.32-billion listed common shares.
Alliance Global’s ownership in Megaworld after the transaction was not immediately available.
Megaworld has programed P35-billion capital expenditure this year, higher than P25 billion in 2012, amid a bullish outlook on the property industry.
The company’s net profit stood at P1.82 billion in the first quarter, up by 15.19% from P1.58 billion in the same period last year.
Revenues were up by 16.43% to P8.15 billion from P7.00 billion in the same comparative period.
Cost and expenses increased by 18.96% to P6.33 billion from P5.32 billion year-on-year.
Shares of Megaworld climbed by six centavos or 1.51% to P4.04 apiece on Friday. -- Cliff Harvey C. Venzon
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