Deal valued at P1B awaits antitrust clearance
CONGLOMERATE SM Investments Corp. (SMIC) is seeking a minority stake as strategic investor in dormitory chain MyTown.
Jose T. Sio, SMIC chief financial officer and executive vice president, noted the SM group has talked to MyTown developer and operator Philippines Urban Living Solutions Inc. (PULS) about buying a minority, non-controlling stake for more than P1 billion.
SMIC is going into an attractive venture as a strategic investor, considering it has no expertise in the field.
“We’ll invest not as a majority shareholder because won’t be managing it,” Sio said, noting SMIC has notified the Philippine Competition Commission (PCC).
The deal with MyTown is expected to push through “two to three months” when the PCC completes an evaluation of the transaction.
Mergers and acquisitions valued at P1 billion must be evaluated by the antitrust body for 30 to 90 days, according to Philippine Competition Act
“We’ve already applied with the PCC. We don’t see any problem. My estimate is that PCC [will finish its evaluation]in two to three months, but normally it should be only one month,” Sio said.
The MyTown venture attracts SMIC because “it’s a new idea, new business, a real property business. It’s for you. The benefit is not so much for [us], it’s for the people down there—the farmers and the workers.”
Established in 2012 by a Dutch-Filipino team formerly engaged in investment banking, PULS owns and operates five dormitory buildings in Makati and Quezon City with 1,100 beds under the MyTown brand.
According to its website, PULS developed MyTown as an affordable option in rental housing for young professionals in central business districts.
It has 14 upcoming MyTown buildings in the pipeline—all in Makati—which will raise its portfolio by more than 6,000 beds by 2018.
Private rooms for individuals cost P17,000 per month, while two people sharing a room pay P8,500 each, and four persons shell out P4,800 each.