Property developer Filinvest Land Inc. (FLI) announced Wednesday a “tender offer via share swap” plan that will allow its stockholders to exchange their FLI shares for Filinvest REIT Corp. shares.
FLI said in a disclosure to the stock exchange its board approved the buy-back of up to 1.866 billion common shares, representing 7.69 percent of its total shares.
The offer gives FLI shareholders the chance to trade their shares for FILRT shares, which are expected to provide higher value and better dividend yields.
Shareholders can benefit from the potential growth of FILRT while receiving a premium price for their FLI shares by participating in this exchange.
If successful, the buyback will increase FILRT’s public ownership to 46.75 percent, exceeding the Philippine Stock Exchange’s minimum requirement of 33.33 percent for real estate investment trusts (REITs).
FLI president and chief executive Tristan Las Marias said the buyback not only offers a favorable price compared to the current market value of FLI shares but also enhances shareholder value through the higher-yielding FILRT shares.
“Despite current share price challenges, we continue to believe in the intrinsic value of Filinvest Land, as we enter a more positive macroeconomic environment that favors our business,” Las Marias said.
“The share buyback allows existing FLI shareholders to unlock value. Not only does the offering value their shares higher than the current FLI market price, but they are also getting higher-yielding FILRT shares in return. With this share swap, we are also able to create room for a potential dividend-accretive asset infusion by FLI into FILRT,” he said.
FLI shares traded at a 30-day volume weighted average price (VWAP) of P0.64 and a 10-day VWAP of P0.64, while FILRT traded at a 30-day VWAP of P3.08 and 10-day VWAP of P3.11 as of Sept. 23, 2024.
FLI shares will be exchanged at P1, a 56 percent premium to both its 30-day and 10-day VWAP. The exchange ratio of 3.11 FLI shares to every 1 FILRT share was based on the 10-day VWAP.
FILRT’s portfolio consists of 17 Grade A office buildings with over 300,000 square meters of gross leasable area.
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