TO buy or not to buy Tutuban? Ayala Land Inc. (ALI) has been given more time to make a decision on an acquisition deal.
The property giant now has until December 17 to study a possible deal to buy into Prime Orion Philippines Inc. (POPI), which owns the Tutuban Center in Manila, through subsidiary Tutuban Properties, Inc., the two companies said on Friday.
In two separate disclosures to the Philippine Stock Exchange, ALI and POPI said the two publicly listed firms had mutually agreed to extend the due diligence period for 30 more days for ALI to subscribe to Prime Orion Philippines Inc.
ALI Chief Finance Officer Jaime Ysmael in a phone interview that the company just needs more time to complete the due diligence of the deal.
“So basically, that’s the reason. We just needed more time to evaluate the deal—to complete the due diligence, ” said Ysmael.
In business, due diligence refers to an investigation or audit of a potential investment. It serves to confirm all material facts that are related to a potential sale.
ALI and POPI entered into an Agreement to Subscribe last August 13.
At that time, ALI announced that it would spend P5.6 billion to subscribe to 2.5 million common shares of POPI, making it a major stakeholder of the firm, as it would own 51.36 percent of it.
Asked whether ALI is still wants to push through with the deal with POPI after the extended period, Ysmael said, “I cannot give any feedback right now because we are under a confidentiality agreement.”
POPI is engaged in property development and retail trade. Its subsidiary Tutuban Properties Inc., owns the Tutuban Center in Manila.
ALI said that the acquisition of POPI could be “aligned with the thrust of ALI’s leasing business.