Depressed market valuations are at the center of the Japanese trading giant’s move to more than triple its economic stake in the country’s oldest conglomerate, Ayala President and CEO Cezar Consing said in an interview with Bloomberg TV on Wednesday.
Ayala will receive about P20 billion to strengthen its balance sheet and pursue new opportunities across the group.
How Ayala will use the money
Consing outlined three priorities for the proceeds in an interview with Bloomberg Television:
The planned purchases would increase Ayala’s exposure to discounted subsidiaries while supporting the parent company’s broader value strategy.
Top of mind, based on Ayala’s recent buybacks, is Ayala Land, which has slumped nearly 33 percent since the start of the year and about 44 percent over the past 12 months.
Foreign broker Macquarie recently downgraded Ayala Land to Hold, with a target price of P15.60 per share.
The real estate giant has a 95-percent Buy consensus among 20 stock brokerage houses, data from Bloomberg showed.
Why Mitsubishi is betting bigger
Consing also praised Mitsubishi, an Ayala partner since 1974—two years before the Zobel-led conglomerate made its stock-market debut.
“They look at how Ayala is positioned. They look at the trust that people have in our company and in our businesses,” Consing said.
“They look at how we've [begun] to work the assets much harder. They've looked at the rationalization moves we've made, and they've said, they've agreed with us, this is the time, right? This is the time to bet big on Ayala and on the Philippines,” he added.
Mitsubishi’s full P44.5-billion commitment will raise its economic ownership in Ayala from 4.7 percent to 15 percent.
—Edited by Miguel R. Camus
