Vista Land buys Starmalls, posts P-5B profit in 9 months


(Source: Manila Bulletin | November 10, 2015)
Vista Land & Lifescapes, Inc., the country’s largest homebuilder, is acquiring 88.25 percent of Starmalls, Inc. from the Fine Group for P33.53 billion while the Fine Group is buying an additional P32.89 billion worth of VLL shares.

In a press briefing, Vista Land Chief Executive Manuel Paolo A. Villar said Vista Land has agreed to a purchase price of 4.51 per Starmalls share which represents a significant 44.87 percent discount to Starmalls’ last traded price of 8.18 per share as of November 9, 2015.

The Fine Group will in turn subscribe to approximately 4.6 billion new Vista Land shares at 7.15 per share, representing a 25.88 percent premium to Vista Land’s last traded price of 5.68 per share as of November 9, 2015.

A tender offer will be conducted for the remaining Starmalls shares under the same terms and conditions. Vista Land and Starmalls are both principally owned by the family of business tycoon Manuel B. Villar Jr.

Meanwhile, Vista Land reported revenues of P18.5 billion and a net income of P5.0 billion for the first nine months of the year, 10 percent and 18 percent higher than last year’s P16.9 billion and P4.2 billion, respectively.

Sales also remained strong at P42.7 billion compared to last year’s P38.7 billion.

Starmalls owns and operates 10 retail malls in key cities and municipalities, and two business process outsourcing commercial centers in Metro Manila, with a combined gross floor area of 509,385 square meters. It also has four malls and one BPO building currently under construction.

The Starmalls Acquisition will see Vista Land’s total assets increase by 29 percent from P123.3 billion to P158.9 billion.

The younger Villar said that the Starmalls acquisition is expected to accelerate Vista Land’s transition to a fully integrated property developer with extensive synergies and a clear focus on integrated CommuniCities.

The combined business’ enhanced scale will also strengthen Vista Land’s balance sheet and funding flexibility.

“This acquisition introduces a recurring revenue source that adds stability to our existing operations. As we integrate both platforms, the complementary nature of residential and commercial developments will enable us to achieve higher selling prices, increased sales velocity and higher retail rental rates from our improved integrated product offering, as well as lower land acquisition and infrastructure costs,” he said.

He added that “we have identified about 100 areas or over 600 hectares of land from our existing Communicities around the country with ready population catchment areas for potential Starmalls projects.”

Vista Land chairman Manuel B. Villar Jr. said “we believe that the acquisition of Starmalls, with its retail malls and BPO commercial centers, is transformative for Vista Land and represents a major step to realizing our vision of becoming a top integrated real estate developer.”

He added that, with the added expertise of Starmalls, Vista Land can now look at various joint venture offers from landowners for integrated residential, retail and commercial development which will also include the retail, school and hospital businesses of the Villar family.

Vista Land and Starmalls have together built more than 300,000 homes and 22 commercial buildings and have an established presence in 92 cities and municipalities across 35 provinces.

Combined, they would have the widest geographical reach in the real estate business and establish itself as a top 4 integrated property developer.