C01228-2021

SECURITIES AND EXCHANGE COMMISSIONSEC FORM 17-C

CURRENT REPORT UNDER SECTION 17
OF THE SECURITIES REGULATION CODE
AND SRC RULE 17.2(c) THEREUNDER

1. Date of Report (Date of earliest event reported)
Feb 26, 2021
2. SEC Identification Number
34218
3. BIR Tax Identification No.
000-153-610-000
4. Exact name of issuer as specified in its charter
AYALA CORPORATION
5. Province, country or other jurisdiction of incorporation
PHILIPPINES
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
32F to 35F, Tower One and Exchange Plaza, Ayala Triangle, Ayala Avenue, Makati Cit Postal Code 1226
8. Issuer's telephone number, including area code
(02)7908-3000
9. Former name or former address, if changed since last report
N/A
10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA
Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
Common Shares 627,415,324
Preferred B Series 1 Shares 20,000,000
Preferred B Series 2 Shares 30,000,000
Voting Preferred Shares 200,000,000
11. Indicate the item numbers reported herein
Item 9

The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.

Ayala CorporationAC

PSE Disclosure Form 4-2 - Acquisition/Disposition of Shares of Another Corporation
References: SRC Rule 17 (SEC Form 17-C) and
Section 4.4 of the Revised Disclosure Rules

Subject of the Disclosure

Acquisition of Healthway Philippines, Inc. (“Healthway”) of Interest in Mercado General Hospital, Inc. (“MGHI”)
Background/Description of the Disclosure

Ayala Corporation’s (“AC”) healthcare arm, Ayala Healthcare Holdings, Inc. (“AC Health”), through its wholly owned subsidiary Healthway, has executed agreements to acquire a 54.2% economic interest in MGHI through the (1) purchase of 28,125,782 common shares and 330,607 preferred shares from White Knight Holdings, Inc. (“White Knight”), a wholly owned subsidiary of Ayala Land, Inc., equivalent to 39.2% of the outstanding capital stock of shares of MGHI, and (2) purchase of 10,887,842 common shares from Dr. Edwin M. Mercado, Ma. Soledad V. Mercado, Dr. Edward V.A. Lim, Susan M. Lat, Dr. Jose V. Tecson III, Atty. Nirmala Barbara S. Vanguardia, Edwin G. Magsino, Diana Kristine L. Carpio, Dr. Alma Panganiban-Andal, Prescilla T. Molinyawe, Nerissa M. Austria, Zosimo C. Malabanan, and Dr. Menandro A. Villadelgado (collectively, “Mercado Group”), which is equivalent to 15% of the outstanding capital stock of shares of MGHI.

Furthermore, Healthway will subscribe to 38,250,000 cumulative, redeemable, and non-participating preferred shares from White Knight and Mercado Group equivalent to 34.51% of the outstanding capital stock of shares of MGHI. This will bring Healthway’s voting interest in MGHI to 70%.

The transactions are subject to fulfillment of certain conditions precedent.
Date of Approval by
Board of Directors		 Oct 7, 2020
Rationale for the transaction including the benefits which are expected to be accrued to the Issuer as a result of the transaction

The acquisition of interest in MGHI allows AC Health, through Healthway, to add a hospital platform in its portfolio. The addition of a hospital platform to the AC Health portfolio will allow it to leverage operational efficiencies and to offer a full suite of services across the full continuum of care.
Details of the acquisition or disposition
Date Feb 26, 2021
Manner

The acquisition of 54.2% shall be through the purchase of shares, while the remaining the remaining percentage to bring Healthway’s voting interest to 70% shall be through the subscription of new shares to be issued by the MGHI.
Description of the company to be acquired or sold

MGHI is a company that owns, controls or has interests in, directly or indirectly, companies that own, operate and manage hospitals, medical and clinical laboratories, and such other enterprises which may have similar or analogous undertaking or dedicated to service in connection therewith, including hospitals and clinics operating under the name and style “Qualimed”, including Daniel Mercado Medical Center, Mercado General Hospital San Jose Del Monte, Inc., Mercado General Hospital Sta. Rosa, Inc., Panay Medical Ventures, Inc., Mercado Ambulatory and Surgical Centers, Inc., DMMC Institute of Health Services, Inc., Qualimed Physicians Associates, Inc., Panay Medical Ventures Rehabilitation Center, Inc., Panay Medical Ventures Eye and Ear Center, Inc. and Iloilo Fertility and Reproductive Care Center, Inc.
The terms and conditions of the transaction
Number of shares to be acquired or disposed 77,594,231
Percentage to the total outstanding shares of the company subject of the transaction 70
Price per share Less than 10% of AC's total equity
Nature and amount of consideration given or received

The amount is not material as it is less than 10% of AC’s total equity.
Principle followed in determining the amount of consideration

Comparable market multiples, discounted cashflow methodology and other relevant metrics.
Terms of payment

Payment on the date of the completion of conditions precedent (“Closing Date”).
Conditions precedent to closing of the transaction, if any

Conditions precedent include: Approval of the amendment of the Articles of Incorporation and By-Laws of MGHI to reflect revisions therein, including the increase in authorized capital stock and creation of voting, cumulative, redeemable and non-participating preferred shares; Renewal of relevant permits; Execution of agreements to purchase the hospital buildings from Ayala Land, Inc.’s subsidiaries and related companies
Any other salient terms

None
Identity of the person(s) from whom the shares were acquired or to whom they were sold
Name Nature of any material relationship with the Issuer, their directors/ officers, or any of their affiliates
White Knight Holdings, Inc. Affiliate
Dr. Edwin M. Mercado N/A
Ma. Soledad V. Mercado N/A
Dr. Edward V.A. Lim N/A
Susan M. Lat N/A
Dr. Jose V. Tecson III N/A
Atty. Nirmala Barbara S. Vanguardia N/A
Edwin G. Magsino N/A
Diana Kristine L. Carpio N/A
Dr. Alma Panganiban-Andal N/A
Prescilla T. Molinyawe N/A
Nerissa M. Austria N/A
Zosimo C. Malabanan N/A
Dr. Menandro A. Villadelgado N/A
Effect(s) on the business, financial condition and operations of the Issuer, if any

The investment in Qualimed provides AC Health with a network of general hospitals within its network which completes the continuum of patient care, from primary clinics, multi-specialty care and now to hospital care.
Other Relevant Information

This disclosure was amended on February 26, 2021 to reflect the following:

1) Transaction completed for 11% of the 15% to be acquired from the Mercado Group. Remaining 4% expected to be completed within March 2021
2) Transaction completed for the acquisition of the 39.2% stake of WHI in MGHI
3) Subscription agreement for voting preferred shares to take HPI’s voting in MGHI to 70% has been completed
4) The execution of agreements for MGHI’s relevant subsidiaries to purchase the hospital buildings from Ayala Land, Inc.’s subsidiaries and related companies as part of the conditions precedent to close the transaction.
Filed on behalf by:
Name Celeste Jovenir
Designation Investor Relations Head