Filinvest Land Inc. on Wednesday said its board of directors approved the voluntary offer to reacquire up to 1.86 billion common shares equal to 7.69 percent of outstanding stock in exchange for Filinvest REIT Corp. shares.
The company said it will purchase the shares at an exchange ratio of 0.32 Filreit share for every FLI share tendered.
The transaction provides FLI shareholders the opportunity for the shares to be bought back in exchange for Filreit shares. FLI stockholders stand to benefit from a price appreciation and stronger dividend yield from Filreit shares, the company said.
“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. The share buyback allows existing FLI shareholders to unlock value,” Tristan Las Marias, FLI president and CEO, said.
“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 Filreit. With this offering, we intend to safeguard our investors from market volatility to allow them to maximize value from our shares,” he said.
Upon completion of the share swap, public ownership of Filreit increases to 46.75 percent or above the 33.33 percent minimum requirement for real estate investment trusts.
FLI shares traded at a 30-day volume weighted average price of P0.64 and a 10-day VWAP of P0.64 as well. Filreit traded at a 30-day VWAP of P3.08 and 10-day VWAP of P3.11.
FLI shares exchange at P1 each, representing a 56 percent premium on both the 30-day and 10-day VWAP. The exchange ratio of 3.11 FLI shares to every 1 Filreit share is based on the 10-day VWAP.
FLI engaged FTI Consulting to issue a valuation opinion determining a reasonable and fair range of prices for both FLI and Filreit shares and the exchange ratio.
