Ayala Group to Sell Shares in Manila Water Company for P5.7 Billion
After selling its majority stake in Manila Water Company (MWC) to billionaire Enrique K. Razon Jr. two years ago, the Ayala Group is further reducing its ownership in the water concessionaire. The move is expected to raise P5.7 billion for the Zobel conglomerate.
In a disclosure to the Philippine Stock Exchange, Ayala Corporation announced that it will sell 289 million MWC common shares, while its subsidiary Philwater Holdings Company, Inc. will sell 436.24 million MWC participating preferred shares back to MWC through a buyback transaction.
Upon completion of this transaction, Ayala will retain an effective 23.5% voting stake and an effective 22.5% economic stake in MWC.
According to MWC’s last public ownership report, Ayala still owns 30.06% of MWC common shares, while Razon has a 31.21% interest in the company. However, this does not include preferred shares or a previous agreement by Ayala to cede voting rights to Razon.
Ayala stated that this sale is aligned with its strategy to rationalize its portfolio and raise P50 billion in proceeds. The funds will be used to reduce debt and finance future investments.
The sale of AC’s common shares in MWC will be done through a regular block trade at the Philippine Stock Exchange, while Philwater’s participating preferred shares in MWC will be sold directly to MWC.
The common shares of MWC were priced at P17.1647 per share based on a 30-day volume-weighted average price as of October 10, 2023, with a 4% block discount. The preferred shares were priced on a negotiated basis at P1.7165 per share.
In June 2021, the Ayala Group officially transferred control of MWC to Razon after he purchased a 24.96% stake in the company, granting him 51% voting power.
Manila Water also informed the Philippine Stock Exchange about the change in its controlling shareholder from Ayala’s Philwater Holdings Company (PHC) to Razon’s Trident Water Company Holdings Inc.
In February 2020, Razon’s Prime Metroline Holdings (now known as Prime Strategic Holdings Inc.), on behalf of Trident, signed a subscription agreement with MWC to acquire 820 million MWC common shares.
Trident’s subscription represented approximately 11.91% of the total issued and outstanding capital stock of MWC and 24.96% of the economic rights in MWC. The subscription agreement also granted Trident proxy rights over a block of preferred shares in MWC, giving it a 51% voting interest.
Through an amendment to the subscription agreement in February 2021, Trident agreed to buy 2.69 billion preferred shares in MWC from PHC, further solidifying its 51% voting interest in the company.
Trident also conducted a mandatory tender offer for 1.12 billion common shares of MWC, approximately 54.16% of the outstanding common shares. This offer excluded the common shares held by Ayala Corporation and its nominees, as well as the preferred shares held by Philwater.
