Shang Properties bought company from San Miguel for P2.5B

Shang Properties [SHNG 3.90, down 1.5%; 27% avgVol] [link] disclosed that it purchased Rapidshare Realty and Development Corp. (RRDC), which is a subsidiary of  San Miguel Corp. [SMC 86.90, down 0.1%; 37% avgVol], from SMC for “approximately” P2.5 billion. SHNG said the purchase of RRDC gives it “ownership of [RRDC’s] non-moving business and assets”, but did not elaborate on what those might be. Bilyonaryo referred to RRDC as an “inactive subsidiary” of San Miguel Properties. 

 

MB bottom-line: As Miguel Camus pointed out on Twitter, SHNG’s disclosure doesn’t really tell investors anything about what it is buying or why. We can make an educated guess that, as a property developer, SHNG is probably buying this company because it owns some real estate that SHNG would like to develop. The relatively high purchase price for an “inactive subsidiary” would support that reading of the transaction. However, SHNG itself gives us nothing to work with, aside from the vaguely circular statement that owning the company will give it control of the company’s assets. Yep, that’s how it works!

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