PLDT group offers to acquire San Miguel's stake in Meralco

MANILA - A top official of diversified conglomerate San Miguel Corporation on Thursday said the group led by Philippine Long Distance Corp. (PLDT) chairman Manuel V. Pangilinan offered to acquire their Manila Electric Co. (Meralco) stake through a swap in assets.

San Miguel Corp. president Ramon Ang invited a select group of business journalists and said the group of Pangilinan has offered its affiliates' stakes in the North Luzon toll road and water distribution businesses in exchange for San Miguel's 27 percent stake in Meralco.

"We are friendly with each other, so we can still talk," the executive said. "We are thinking about it and we can still discuss all of these."

If the assets swap involving Meralco pushes through, Ang said San Miguel would go for the best deal in behalf of its shareholders. "What company could be swapped (with me) that has an EBITDA (earnings before interest, taxes, depreciation and amortization) of $500 million?" He was referring to Meralco.

On the table are the stakes of Metro Pacific Investments Corp (MPIC) in Metro Pacific Tollways Corp, the operator of North Luzon Expressway (NLEX), which connects Manila to northern provinces, and Maynilad Water Services Inc., which serves half of Manila's 12 million population.

Both PLDT and MPIC are part of Hongkong-based First Pacific Holdings Corp.

Pangilinan denied however that there were asset swap talks between San Miguel and PLDT.

'Spectacular'

Ang said they might consider to sell their Meralco shares only if the offer would be "spectacular."

"Hypothetically, if we are offered a spectacular price, let's say P500 per share, I'm crazy if I don't recommend that to the board. It is my obligation to do that," Ang explained.

San Miguel has a track record of buying assets here and abroad, selling these later on at a premium.

Ang stressed that they bought into Meralco last year to create value for San Miguel shareholders. "San Miguel is not emotional in anything. What is important to us is to give shareholders the best value returns." He added that they aim to keep their stake in Meralco.

San Miguel has been investing in high-growth industries such as mining, power and infrastructure, after disposing minority shares in a beer subsidiary, which is a market leader. It is in dairy, poultry and processed meat businesses.

Buying price

Ang's San Miguel and Pangilinan's PLDT Group each have accumulated substantial stakes in Meralco, the country's largest power distributor.

In October last year, San Miguel bought its 27 percent direct stake in Meralco from state pension fund Government Social Insurance Service (GSIS) for about P27 billion. San Miguel bought their Meralco shares at P90 per share, payable in three years.

In the run up to the stockholders meeting on May 26, Ang said San Miguel and its allies have accumulated up to 43 percent.

On Thursday, Meralco closed 7.83 percent higher at P124 a piece, while San Miguel ended unchanged at P53 per share.

Source: www.abs-cbnnews.com