CEBU HOLDINGS, Inc. (CHI) is merging with subsidiary Cebu Property Ventures Development Corp. (CPVDC), as it seeks to promote operational synergies between their developments.
In separate disclosures posted after the stock market’s close on Monday, CHI and CPVDC said their respective boards of directors have approved the plan to merge the two companies, with the former as the surviving entity.
CHI is an affiliate of Ayala Land, Inc., and is the developer of the 50-hectare Cebu Business Park in Cebu City.
“The merger will consolidate the company’s portfolio under one listed entity, creating a unified portfolio for its investments and is expected to result in operational synergies, efficient funds management, and simplified reporting to government agencies as a result of the merger,” CHI said.
CHI will exchange 1.06 common shares for every one share of CPVDC Class A common shares or Class B common shares, resulting to 996.77 million CHI shares at the end of the merger. CHI said the exchange ratio was based on the net asset values of both companies.
With this, CHI will have a total of 2.916 billion outstanding shares after the merger. CPVDC, meanwhile, will cease to exist, should the transaction be approved by the Securities and Exchange Commission (SEC). CPVDC said all its assets and liabilities will also be absorbed by CHI.
The companies will seek the approval of their respective shareholders during the annual stockholders’ meetings on April 10. If approved, they will notify the SEC of the merger, which is expected to be approved within the next two months.
Incorporated in 1990 as a joint venture corporation between the province of Cebu and ALI, CPVDC is the owner and developer of the Cebu IT Park. The development covers 27 hectares and has been accredited as an IT park by the Philippine Economic Zone Authority in 2000.
Cebu IT Park is 1.5 kilometers away from CHI’s Cebu Business Park, which features residential, office, retail, and leisure facilities. Through CPVDC, CHI is also involved in the sale of office and residential condominium units, commercial lease of retail space, sale of proprietary sports club shares, and hotel development and operations.
CPVDC’s market capitalization stood at P3.385 billion on Monday, while CHI’s market cap was at P11.712 billion.
Both companies said they will disclose further information on the merger in due course.
Shares in CHI gained four centavos or 0.66% to close at P6.14 each, as CPVDC saw its shares rise 10 centavos or 1.67% to P6.10 apiece at the Philippine Stock Exchange on Monday. — Arra B. Francia
