Metro Pacific, PLDT to fuse Meralco shares

Written by Miguel R. Camus

BusinessMirror 

HONG KONG-based conglomerate First Pacific Co. Ltd. is planning to consolidate its combined 34.7-percent stake in Manila Electric Co. (Meralco) under a new holding firm. The shares are currently held by subsidiaries Metro Pacific Investments Corp. and Philippine Long Distance Telephone Co. (PLDT)

First Pacific, led by businessman Manuel V. Pangilinan, is the parent company of listed infrastructure firm Metro Pacific and the single largest shareholder of PLDT.

In separate filings to the local stock exchange on Monday, Metro Pacific and PLDT unit Pilipino Telephone Corp. (Piltel) said they are in talks for a proposed “combination and reorganization of their respective shareholdings in Meralco.”

A Metro Pacific executive said the new company—which is still unnamed at this point—will be jointly held by Metro Pacific and Piltel. The executive, who requested anonymity, noted that “nothing is final for now.”

At present, First Pacific’s holdings in Meralco are split between Metro Pacific (14.7 percent) and Piltel (20 percent).

“This way, [investors] can see outright that this [single new] company controls a significant stake in Meralco and it should have a significant say in the management of Meralco,” said the Metro Pacific executive, who added that the agreement may be completed within the first quarter.

As this developed, Metro Pacific is also ironing out details with Lopez-led First Philippine Holdings Corp. (FPHC) for the further acquisitions of half of the clan’s remaining 13.4-percent stake in Meralco.

In an effort to secure the Lopezes 6.7-percent stake in November last year, Metro Pacific matched a rival bid of P300 per share, a 36-percent premium at that time. Shares of Metro Pacific ended Monday flat at P2.22 each.

Joey Roxas, analyst and president of Eagle Equities Inc., said the consolidation may be a move to allay fears that Metro Pacific will have difficulty financing its further acquisition of Meralco shares.

“It can help with the financing. It’s usually harder to get financing if the ownership of the shares is separate,” said Roxas in a phone interview.  “If they put [all the shares] under one roof, they can use it as collateral and then go to the banks.” Read more...