Shoemart strengthens hold on SMDC, eyes more shares

REPORT FROM BUSINESSWORLD SY-LED investment company Shoemart, Inc. on Monday said it completed its P5.2-billion tender offer to minority shareholders of real estate affiliate SM Development Corp. (SMDC). The purchase of 35.3% or about 1.31 billion SM Development shares at P3.95 apiece increased Shoemart’s stake in the housing company to 51% from 15.7% previously. The tender offer, which was completed on Nov. 16, was in line with parent firm SM Investments Corp.’s program to consolidate its real estate operating subsidiaries under newly appointed property holding firm Shoemart. Consolidation Consolidating its real estate development businesses, SM Investments earlier said, would help simplify its organizational structure and attract more investors. In its tender offer report to the exchange, Shoemart, which is unlisted, said it was also negotiating to buy the remaining 49% stake in SM Development currently held by SM Investments. This new acquisition will involve 1.82 billion shares and will be done through another share swap, Shoemart said. SM Investments’ businesses include retail merchandising, mall operations, banking and finance and property development. Financial performance The company realized a net income of P8.5 billion for the first three quarters of the year against P7.5 billion last year, buoyed by higher revenues from its retail merchandising, shopping mall and property businesses. Shoemart has said it intends to acquire 100% of the outstanding shares of common stock of SMDC. Shoemart is engaged in investing in shares of stock of other companies, leasing and subleasing certain property and equipment, providing management services and prospectively, engaging in property development and sales. The tender offer started on Oct. 16.