PSE Circular for Brokers No. 945-99

April 30, 1999 PSE CIRCULAR FOR BROKERS NO. 945-99 TO Philippine Stock Exchange, Inc., ATTN Grace B. De Guia Assistant Manager Disclosure Department FROM JOSE T. SIO Senior Vice President Finance DATE 30 APRIL 1999 This is to confirm our telephone conversation early this morning regarding the article appearing in Manila Times . Our position is that SM Prime had preliminary discussing with Uniwide regarding certain sites. However, there is no definite decision that was attached regarding this matter Thank you SM Prime wants only select Uniwide assets By Carmina E. Reyes Reporter SM PRIME Holdings Inc., which is controlled by the family of retail magnate Henry Sy Sr., yesterday confirmed it was interested only in certain assets of Uniwide Holdings Inc. Henry Sy Jr., a director of SM Prime, said their company is carefully studying a plan to acquire "certain sites" of Uniwide warehouses which would fit into their P3.35-billion expansion program this year. "We are contemplating on a per site basis. This is still under right now," the younger Sy said in an interview. This developed as SM Prime estimated its first-quarter profit grew more than 10 percent from the same quarter a year earlier. SM Prime senior vice president Jose Sio told the company's annual stockholders' meeting that final figures aren't yet available. The company earned P661 million in the first three months of 1998. For 1998, SM Prime Holdings earned an income of P2.72 billion, up 20 percent on the year before. Rent from its mall tenants accounted for 70 percent of its 1998 revenue. SM Prime shares were unchanged at P8.80. Asked which of the SM group may engage in a joint venture or partnership deals with the Uniwide group this year, Sy said the study was still in preliminary stage. "We haven't gone into that stage. ... We want sites that won't cause redundancy to the company." Along with this disclosure, the younger Sy also said SM Prime would concentrate on building smaller shopping malls in suburban areas in coming years as part of its shift in focus to "second-tier regional centers." "We are embarking on a new project concerning malls that would suit the second-tier regional markets. We would build smaller malls but the rate of return would be possibly the same," Sy said. According to Sy, the smaller malls would have an average mall space of 50,000 square meters to 80,000 square meters and will be built in outlying cities. "We would try to expand to markets we haven't tapped yet. One example is a prospective mall between Megamall in Mandaluyong and SM Southmall in Las Pias. The area is not really a regional one but a considerable market," Sy said. The Times earlier reported that the SM group planned to buy into Uniwide Holdings, a rival in the grocery and supermarket segment. A highly-place source told The Times Sy was interested in Uniwide since it complements his core businesses. "He asked certain people to study Uniwide. The business is related to his core businesses which are shopping mall and property development. It would complement the SM group. Like SM, Uniwide also caters to the masses," the source said.