Villar merges Vista Land, Starmall in P33-B buyout

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REAL estate magnate and former Senator Manuel Villar has joined the sector’s township trend, which he prefers to call “communicities” by merging his affordable housing and mall businesses.

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In a disclosure to the Philippine Stock Echange on Tuesday, Vista Land and Lifescapes Inc., Villar’s publicly listed affordable housing holding company, said it is acquiring 88.25 percent of Starmalls Inc. from Fine Properties Inc., also a publicly listed investment holding firm of the Villar family.

Vista Land is buying Starmalls’ shares for a sum of P33 billion, or at P4.51 a piece, a 45 percent discount to Starmalls’ last traded price of P8.18, based on Bloomberg Business data.

At the same time, Vista Land’s disclosure said Fine Properties would subscribe to close to 4.6 billion new Vista Land shares at P7.15 per share.

Vista Land shares rose 1.23 percent to P5.75 per share at the close of stock trading Tuesday, while Starmalls were unchanged at P8.18, and the Philippine overall index fell 0.7 percent.

Financial Times’ consensus forecast among eight polled investment analysts were even advising investors to purchase equity in Vista Land, as the company’s stock is expected to outperform the market.

Last month, former Senator Villar, who had built his fortune building mass housing units, was reportedly planning to combine his affordable housing and mall building ventures to turn his housing projects across the Philippines into self-contained communities, or what he calls “communicities.”

Stock data analyst Bloomberg has placed Vista Land’s, market value at P49 billion, while Starmalls, at P69 billion.

Vista Land CEO Manuel Paolo Villar, the former senator’s eldest son, said Vista Land’s acquisition of Starmalls would accelerate the company’s transition to a fully integrated property developer.

“Starmalls has a very impressive pipeline,” the younger Villar said. “Right now, they have 12 malls and five under construction that will soon be completed within the year. That’s an 800,000 square meter of Gross Floor Area. That puts a significant amount of return in revenue and makes us essentially the top-four integrated real estate developer.”

He added that the acquisition would change the Vista Land’s revenue profile and capital expenditure budget.

“It will substantially change it because we’re going from an almost purely residential developer, to a developer with a significant amount of different use,” said Villar.

He said the capex for Starmall projects is not yet included in Vista Land’s current P25.1 billion capex budget for the year.

“The P25 billion capex is for Vista, so obviously, the transaction is not in yet. We just filed with the SEC (Securities and Exchange Commission), so it’s still pending approval.” Villar clarified.

He said the company plans to de-list Starmalls from the PSE, as it will be a subsidiary of the Vista Land.

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