Well well well. Talk about great timing.
Last night I just posted that SMDC and SMPH haven’t announced any concrete plans on their consolidation. And just today, upon the market’s opening, SMDC, SMPH and SMIC were all put on trading halt (for the whole day) as they are about to disclose a very material development on their consolidation plans.
I get this feeling that they have been reading this blog all along. Haha feeling.
And so we waited and around lunch time, the disclosure was posted in PSE. Won’t go into details, you may read the full heavy disclosure in PSE website while here is their press release. Followers of the stocks have also weighed on what the disclosure means to them, providing some computations, see forum here.
Here’s my own limited understanding though (feel free to correct me if I’m wrong):
- SMDC will eventually delist from PSE as SM Land acquires the remaining shares owned by the public.
- SMDC will fold into SMPH plus other subsidiaries such as Highlands Prime, and non-listed entities. SM Land shall merge with SMPH as well.
- SMDC shares owned by the public will get SMPH shares in return (as SM Land’s repayment), with ratio of 0.472 SMPH shares for every SMDC share held
- The revitalized and enlarged company will now be called the New SM Prime (ala Optimus Prime?), touted to be one of the biggest real estate and property development companies in the Philippines and in South East Asia, effectively dislodging Ayala Land as the biggest real estate company in the country
- Officers of the New SM Prime were also disclosed, open to your interpretations.
As to how this reflects in PSE once trade halt is lifted, I do not know. Seems like valuation of SMDC is meant to increase since .472 of SMPH (@19.50) is 9.20 and SMDC is at 7.90 when it was put on trading halt. But this SMPH price is as at May30. I think what they used in the disclosure are prices as at Mar30. We’ll see how the market interprets this and reacts to it on Monday.
I hope this synergy proves beneficial to the shareholders of the companies involved. Personal disclosure is that I have both SMPH and SMDC shares.
We’ll see, we’ll see.