Ayala Corp. (AC) is in negotiations with a strategic partner to purchase some of its shares, the country’s oldest conglomerate said in a regulatory filing last week.
“AC is currently in discussions with a strategic investor which has expressed interest in acquiring a portion of its ownership stake in Mynt subject to completing due diligence and receiving its approvals,” the company said.
This came as Ayala invested P23 billion in Mynt last week, matching MUFG’s 8 percent purchase of the financial technology giant.
This raised Ayala’s stake from 5 percent to 13 percent.
Say that again?
It appears there’s a second stage to this deal, with MUFG’s entry being only the first phase.
Ayala purchased additional shares with the intention of selling all or part of these to another strategic entity.
Apart from Ayala and MUFG, Mynt’s other major shareholders are Ayala telecommunications arm Globe Telecom and China’s Ant Financial, each owning roughly a third of the company, with the remainder split among other financial investors.
Strategic partner
A strategic investor offers industry expertise and long-term support in addition to financial resources. In contrast, a financial investor primarily invests money to grow the business but plans to profit from its investment and exit within a shorter time frame.
As Globe CEO Ernest Cu pointed out in this Insider Insight report, MUFG is a strategic investor given their plans to aggressively grow GCash’s lending business.
What Ayala's management says
At the moment, not very much, since negotiations are ongoing.
“If another strategic investor can add value to Mynt, it may make sense to sell some shares. But just discussions for now,” Ayala president and CEO Cezar P. Consing told InsiderPH.
More importantly, Consing said Ayala intends to remain a direct shareholder of Mynt even after this second potential deal is completed.
"We will keep a stake in Mynt, directly and through Globe. GCash fosters financial inclusion and we are excited by Mynt’s growth prospects,” he said.
What analysts think
Analysts are generally satisfied with the deal outcome with MUFG and some have even upgraded Globe’s price target to account for Mynt’s sudden valuation spike from $2 billion in 2021.
The entry of a second strategic investor could also further delay an initial public offering of Mynt, which could easily be the largest in the Philippines if it were launched today.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
