Six for me, seven for my enemy

Philippine Daily Inquirer
Doris C. Dumlao

MANILA, Philippines - The market has been abuzz with rumors that the Lopez family has already agreed to sell at least another six-percent stake in power retailer Manila Electric Co. to First Pacific Co. Ltd. of Hong Kong led by Manuel V. Pangilinan.

We asked First Philippine Holdings Corp. about this, but its vice president, Benjamin Lopez, son of patriarch Oscar Lopez, said there’s no such deal.

It seems, however, that there is a live offer on the table, especially after First Pacific announced a $282.3-million stock rights offering and cited in its prospectus that Metro Pacific Investments Corp. wants to raise its stake in Meralco to at least 20 percent and is in talks with various parties to achieve this. It now holds 14.7 percent, so the 6-percent minimum target as “whispered” in the market made sense.

But why stop at 6 percent, many stock analysts wonder, when the First Pacific group has the right to get a first crack at the entire 13.4-percent remaining stake of the Lopezes? Is this all that the clan wants to sell? Is this a size sufficient to attain a decisive controlling block in Meralco while avoiding a tender offer? (But MVP’s group now has a total of 34.7 percent, anyway, which is very near the 35-percent tender offer trigger.) Will the rest of the shares be sold to another group, allied or not? Read More...