SM Prime to acquire Sy family's China malls for P10.8B

Mall operator SM Prime Holdings Inc. has received board approval to fold into the company the three SM malls in China currently owned by the Sy family. The firm said the acquisition will give it the opportunity to expand in the high-growth China market. “The three malls provide an existing platform for SM Prime to expand in this fast-growing market. While SM Prime is still firming up its expansion plans in China, and subject to the availability of suitable locations, the Company may initially build 1 to 3 malls every year and will likely position its expansion in the second- and third-tier cities," the company said in a statement to the Philippine Stock Exchange. SM Prime will pay P10.8 billion for the three malls. The acquisition price was based on a 20 percent discount to the gross appraised value of the malls less outstanding liabilities. The acquisition will be effected through a share swap where SM Prime will issue 913 million new shares to the Sy family. “While SM Prime continues to expand its operations in the Philippines, its planned acquisition of the China malls will provide its shareholders the opportunity to tap and take advantage of the high growth prospects offered by China, being Asia’s growth leader. SM Prime takes pride in being a Filipino company, but it is also the goal of SM Prime to give pride to Filipinos by becoming an active player in the Asian region as well," SM Prime president Hans Sy said in the statement. The Sy family already owns a substantial amount of shares in SM Investments Inc., the parent company of SM Prime. The firm earlier appointed Citigroup Global Markets Limited and Macquarie Securities (Asia) Pte Ltd. as its financial advisers for the acquisition and Savills Valuation and Professional Services Ltd. as independent asset appraiser. The SM malls in China are located in the southern and wetern parts of China namely, Xiamen, Jinjiang and Chengdu. Among the anchor tenants of the three malls are Wal-Mart and SM-Laiya Department Store, Cybermart and Wanda Cinema. Junior anchors include Watsons, McDonald’s, KFC, Giordano, Pizza Hut and a number of China-based outlets and stores. - GMANews.TV