PLDT, Metro Pacific stockholders meet today

The two Philippine firms at the center of a takeover battle will face shareholders today, less than a week after First Pacific Co. Ltd. revealed plans to sell stakes in both companies to a local tycoon.

Officials at Philippine Long Distance Telephone Co. (PLDT) and Metro Pacific Corp. are not expecting fireworks, but shareholders are expected to question the deal giving control of the stakes to Chinese-Filipino tycoon John Gokongwei.

"There’s a $925-million deal and we heard there’s a plan to acquire PLDT shares at around 1,100 plus per share. But now the share price is doing at P430. There is a dampener at the stock and the owners are not explaining to shareholders," said Teodoro Ela, a government worker who has PLDT shares.

Metro Pacific will hold its annual meeting earlier in the day.

Last week, the Gokongwei family said it would pay over $600 million for two-thirds ownership of a joint venture with First Pacific. The joint venture would take over the Hong Kong-based conglomerate’s controlling 24.47 percent stake in PLDT and an equity interest in a property unit of Metro Pacific Corp.

The board of PLDT signalled it was opposed to the deal, which it said would be detrimental to the firm.

"It will be a tightly-guarded affair. The deal is not part of the agenda but we may have to deal with questions on the floor from shareholders," a PLDT source said of the annual meeting.

The Gokongweis own one of the largest conglomerates in the Philippines, JG Summit Holdings Inc., as well as phone company Digital Telecommunications, Inc. (Digitel), which directly competes with PLDT in landline and Internet services.

Business as usual

Despite the planned deal, officials at the two target companies said it would be business as usual today.

"It’s going to be a standard annual meeting. There will be a review of 2001 performance and talk about company’s financial progress so far," a Metro Pacific official said.

A PLDT source told Reuters incumbent PLDT directors were expected to be re-elected at the annual meeting, even though they are opposed to First Pacific’s plans.

The source added that Japan’s Nippon Telegraph and Telephone, which has a 15 percent stake in PLDT, was likely to announce its position on the deal at the annual meeting.

The consent of Japan’s dominant telecoms carrier is crucial for the First Pacific-Gokongwei deal to go ahead, insiders said.

"NTT has issued a strongly worded letter to First Pacific, dated June 3, saying it has not waived any of its rights under the shareholders’ agreement and specifically reserves the right to withhold its consent to the proposed transaction," a PLDT official said.

A spokesman for NTT Communications, a long-distance unit of NTT which directly owns the stake in PLDT, declined comment on the rumors of an announcement by NTT at today’s meeting.

"We don’t make comments on individual deals," he said.

COUNTEROFFER

A source close to the group led by PLDT’s chairman, Antonio "Tony Boy" Cojuanco, told Reuters that major investors will step up plans for a counteroffer to First Pacific following the shareholders’ meeting.

The investors involved in the counteroffer include Cojuanco, Manila’s Chinese-Filipino family Yuchengco group, NTT, and PLDT CEO Manuel "Manny" Pangilinan, according to the source.

To avoid conflicts of interest, First Pacific told Pangilinan in a letter that he could not vote on PLDT and Metro Pacific matters. Pangilinan is also executive chairman of First Pacific.

"The letter merely reflects the consensus of First Pacific’s board of directors, including Manny, in that proper corporate governance procedures need to be observed in order to avoid any potential conflicts," company spokeswoman Rebecca Brown said.