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Ayala Land JV mulls options to shore up convenience store business

SIAL CVS Retailers Inc., Ayala Land Inc.'s joint venture with SSI Group Inc. that owns FamilyMart, is looking at several options to bolster and drive up its convenience-store chain business.

In a statement addressed to the Philippine Stock Exchange, Ayala Land said its joint venture "is currently exploring various options intended to strengthen and grow the business of Philippine FamilyMart CVS Inc."

The disclosure comes as a clarification to a Philippine Daily Inquirer report about the potential sale of the FamilyMart convenience store to prospective investors amid heightened competition in the 24/7 retailing business in the Philippines. The report also quoted an undisclosed Ayala company source's opinion that the group's core business did "not really" include 24/7 retailing.

According to a few market sources cited by the Oct. 9 report, the convenience store's local network of 72 stores has been offered to buyers in the past months, with Credit Suisse and UBS helping to market the chain.

However, Augusto Bengzon, vice president, CFO, treasurer, chief compliance officer and chief information officer, said the company was only studying its options. Bengzon's response came on the back of the unnamed company source revealing to the publication that there was a possibility that Ayala Land might keep its interest in the business and the stake composition behind FamilyMart could be altered.

ATR Asset Management Head of Research Jose Mari Lacson told the paper that FamilyMart has been closing outlets that had proven unprofitable in the past year. He added that selling the business to current players would be difficult, as each FamilyMart location already has an established foreign franchise.

Ayala Land added in its statement that "no definite course of action has been finalized" in its options with FamilyMart and said it will provide the proper disclosures to the stock exchange in a timely fashion.