MEGAWIDE Construction Corp. expects the closing of its acquisition of property developer PH1 World Developers, Inc. before the end of this month.
“Subject to the stockholders’ approval, the signing of the agreement is expected to take place on July 12 [and] subject to the fulfillment of the conditions precedent under the agreement, the closing of the acquisition is expected to take place on July 27,” Megawide said in a regulatory filing on Thursday.
On Wednesday, Megawide’s board of directors approved the acquisition of PH1 from the company’s affiliate, Citicore Holdings Investments, Inc.
The transaction involves the acquisition of 100% capital stock or 579.46 million shares of PH1 for P5.2 billion or P8.97 apiece in line with the fairness opinion report of FTI Consulting Philippines, Inc.
It will be through a share purchase agreement and will be conducted through the sale of Citicore shares in PH1 to Megawide via a cash transaction.
“At the parent level, the acquisition will be considered as an investment in a subsidiary while at a consolidated level, it will be a line-by-line take-up,” it added.
According to the company, the acquisition is still subject to shareholder approval at the company’s annual stockholders’ meeting on July 12.
Megawide said the transaction had been cleared by the Philippine Competition Commission via a confirmation letter of noncoverage and would comply with the Securities and Exchange Commission’s (SEC) rules on related-party transactions of publicly listed companies.
“The company will submit an advisement report to the SEC no later than 3 days from execution of the agreement,” it added.
The construction company said the acquisition of the property developer is part of its strategy for “forward integration.”
“The company acknowledges that real estate development is a natural progression for construction companies. Such forward integration to real estate is expected to create more value within the Megawide group,” it said.
PH1’s portfolio is composed of condominium and residential projects such as The Hive in Taytay Rizal, My Enso Lofts in Quezon City, and Modan Lofts Ortigas Hills at Ortigas Ave. Extension.
In 2022, PH1 booked P66.78 million in net profit, more than eight times its P7.91 million income in 2021.
PH1’s top line likewise rose to P599.78 million in 2022, up by 92% from P311.7 million the earlier year.
On the stock exchange on Thursday, shares in Megawide surged 11 centavos or by 3.34% to P3.40 each. — Justine Irish D. Tabile
