Ashmore gets till Dec 6 to acquire Petron stake

London-based fund manager Ashmore Group has until Dec. 6 this year to exercise its right to acquire the government’s remaining 40-percent stake in Petron Corp., the country’s largest oil firm.

“Based on the right of first offer as provided under the share purchase agreement and the notice of the Philippine National Oil Corp. to Ashmore, the latter has until Dec. 6, 2008 within which to opt to buy or not to buy PNOC’s 40-percent stake in Petron or to assign such right to buy to an eligible third party, Petron said in a disclosure to the Philippine Stock Exchange.

Petron said the exercise of such right depends entirely on Ashmore’s decision.

While Ashmore has earlier disclosed its intention to exercise its right to purchase the government’s shareholdings, Petron said it has yet to receive a formal advice from the UK investment manager regarding its plan.

Early this week, Southeast Asia’s largest food and beverage conglomerate San Miguel Corp. announced plans to acquire Ashmore’s 50.57 percent stake in Petron in its bid to gain outright control of the oil refiner.

Petron president Eric Recto, one of Ashmore’s representatives on the Petron board, said it would be premature to comment at this time on San Miguel’s plan as details of the offer have yet to be firmed up.

San Miguel president Ramon S. Ang, however, said he expects negotiations with the Ashmore Group to be completed in 30 days. The food and drinks firm is also keen on acquiring the government’s stake which will allow it to own up to 90.57 percent of Petron   should it close a deal with the Ashmore Group.

“It’s a must-have deal for San Miguel and the Ashmore Group and whatever needs to get-done will get done,” an analyst at a local brokerage house said.

In order to clinch a deal, price will certainly be an issue. The Ashmore Group wants to sell at a profit but San Miguel reportedly wants to acquire the shares at a reasonable price. 

The government wants to sell its stake in Petron for P6.85 per share to raise around P25.7 billion. At current market prices, the government’s stake is valued at just P17.6 billion following recent sell-offs, spawned by fears of a looming global recession.Ashmore acquired its initial 40-percent stake in Petron early this year from Saudi Aramco for $550 million, or 6.531 per share, below the government’s indicative price. It bought an additional 10.57 percent in Petron at a tender offer to minority investors at the same price, in compliance with securities laws.

Ang said San Miguel has enough resources to fund its takeover targets, which recently include power utility giant Manila Electric Co. (Meralco).