Metro Pacific pays P14.28 billion for 13% Meralco stake, eyes more shares

MANILA, Philippines - Metro Pacific Investments Corp. (MPIC) is acquiring for P14.28 billion the 13-percent stake in Manila Electric Co. (Meralco) currently owned by the PLDT Beneficial Trust Fund (BTF), its unit New Gallant and Crogan Ltd. adding that it plans to acquire more shares in the power distribution utility.

 “MPIC further intends, should suitable opportunities arise, to continue to acquire further shares of Meralco so as to develop its position as a strategic shareholder with appropriate board and management participation,” MPIC president and CEO Jose Ma. Lim said.

To partially finance the P14.28-billion acquisition, MPIC is issuing around 2.7 billion of its common shares valued at P9.5 billion constituting 14.5 percent of MPIC’s outstanding capital stock in favor of BTF and another 742.5 million shares worth P2.6 billion (3.98 percent of total) in favor of Metro Pacific Holdings Inc. (MPHI), currently the majority stockholder of MPIC.

With the issuance of shares to BTF and MPHI, MPIC’s total outstanding shares of 15.2 billion will increase to 18.66 billion with a total capitalization of P34.85 billion. BTF shall become a significant shareholder of MPIC holding 14.5 percent of the latter or an effective economic interest of 19.8 percent while MPHI will reduce its shareholdings in MPIC from 93.5 percent (economic interest of 90.3 percent) to 80.2 percent (72.95 percent economic interest). The issuance is expected to strengthen MPIC’s capital base.

BTF is the retirement fund established for the benefit of qualified employees of the Philippine Long Distance Telephone Co. (PLDT) pursuant to the latter’s benefit plan. BTF subsidiary New Gallant Ltd. is a British Virgin Islands company.

The P12 billion to be paid in cash by BTF and MPHI for the MPIC shares will be used by MPIC to acquire a total of 113.3 million Meralco common shares representing 10.17 percent of the power utility’s capital stock from BTF and New Gallant, as well as 31 million Meralco common shares from Crogan, or a total of 144.38 million shares.

Meanwhile, MPIC’s  purchase price for the Meralco shares held by BTF and Crogan is P126 per share for a total acquisition price of P14.28 billion.

MPIC said the prospective acquisition of a strategic block of Meralco shares is in line with MPIC’s status as one of the country’s leading infrastructure companies and will complement its existing investment in North Luzon Expressway, Maynilad, and hospitals led by Makati Medical Center.

It explained that the possible operational synergies in terms of Meralco’s subscriber base, accessible data centers, wireless bill payments, and transportation fleets is expected to enhance customer response and speed up the coordination system within the MPIC Group.