MVP hikes Meralco stake with P2.2 billion SMC deal

MANILA, Philippines — Tycoon Manuel V. Pangilinan has struck another deal with Ang-led San Miguel Corp.’s power arm to further tighten his hold on Manila Electric Co. (Meralco).

San Miguel Global Power Holdings Corp. (SMGP) has agreed to sell about 3.77 million Meralco shares to Pangilinan at P580.99 apiece for a total consideration of P2.19 billion through a special block sale to be crossed at the Philippine Stock Exchange.

The shares, equivalent to 0.33 percent of Meralco’s total issued and outstanding common shares, will bring Pangilinan’s stake in the power utility giant to 0.34 percent.

The transaction, which remains subject to closing conditions, comes on the heels of SMGP’s sale of P12.4 billion worth of Meralco shares to Pangilinan-led Metro Pacific Investments Corp. (MPIC), a deal announced last week.

Following the transaction, MPIC’s shareholding in Meralco is expected to climb to around 49.4 percent from 47.46 percent, further cementing its position as the utility’s largest shareholder.

Both transactions were valued at a 16.2-percent premium over Meralco’s 90-day volume-weighted average price of P500.09 per share as of Sept. 30.

The purchase price was also more than six times the P90 per share SMGP paid when it acquired the Meralco stake from state-run Land Bank of the Philippines.

SMGP acquired around 46.6 million Meralco shares from Landbank through special block sales last year, marking the completion of a long-delayed transaction that traced back all the way to 2008.

The long-delayed deal meant SMGP received no dividends from the shares, as ownership had yet to be formally transferred.

“The company estimates that dividends that would have accrued on the shares over 17 years totaled about P13 billion,” SMGP said in a statement yesterday.

Factoring in the time value of money, the company also estimates that the forgone dividends would be worth about P21 billion today.

For the MPIC deal, SMGP said it plans to redeploy the capital to support its renewable energy projects, consistent with its long-term strategy of channeling resources toward businesses where it has a more direct operating role.