Ayala Land Inc.’s P3.2 billion block sale of AREIT Inc. shares to institutional investors is positive for the developer’s real estate investment trust arm, as this removes suspension risks ahead of a major asset injection, according to stock brokerage house AP Securities Inc.
On Tuesday, Ayala Land sold 98 million AREIT shares at a modest discount to P32.45 each.
This fully addresses AREIT’s risk of falling below the minimum public ownership requirement of at least 33 percent after Ayala Land completes a P22 billion share-for-asset swap this year.
According to Jose Antonio Cipres, research analyst at AP Securities Inc., Ayala Land needed to sell just 78.6 million AREIT shares for compliance.
The sale of 98 million shares “would be more than enough to raise AREIT’s public float to above 33 percent, removing the overhang that was our main concern.”
Buy rating
“The removal of this overhang presents a great opportunity for the stock’s value to appreciate given its continued increase in declared dividends on both a [quarterly] and [year-on-year] basis alongside continued infusions of properties which again would be dividend accretive to investors,” Cipres said.
AP Securities has a “buy” recommendation on AREIT with a target price of P43.48 per share.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
