Benpres up on Lopez's Meralco sellout report

MANILA, Philippines - Shares of Benpres Holdings Corp. rose 10.29 percent yesterday amid increased speculation of a looming sale by the Lopez family of its shares in power distributor Manila Electric Co. (Meralco).

Benpres is owned 53.7 percent by Lopez Inc., which has an indirect ownership in Meralco through its 43-percent stake in First Philippine Holdings Corp. As of end-June this year, FPHC had a 10.7-percent stake in the country’s largest power retailer.

Investors gobbled up Benpres stocks, making it among the top 10 biggest gainers on the index yesterday with a total of 54.83 million shares changing hands valued at P200.5 million. The stock closed 35 centavos higher at P3.75 each.

The market has been rife with talks that the Lopez family would soon put its remaining 13.4 percent stake in Meralco on the auction block. Rumors have it that the Lopez family, through Benpres, is selling shares to the group of telecommunications magnate Manuel V. Pangilinan and that the sale is expected to be executed anytime soon through a special block sale.

An analyst, however, said the possible sale of the Lopez Group’s shareholdings in Meralco could trigger a bitter takeover battle between the Pangilinan-led group and the other major shareholder in the power utility firm, the San Miguel Group.

The buyer would have to make a tender offer for the remaining shares and the losing group could be forced to sell out, an analyst said.

“I think this is going to be a toss-up between the two groups itching to take a commanding control of the country’s largest power distributor,” the analyst said.

Meralco itself continued its upward streak, rising 3.16 percent or P6 on volume of 903,460 shares worth P177.23 million. From only P166 last Oct. 5, Meralco reached a high of P200 yesterday before closing at P196 each share.

Metro Pacific Investments Corp. (MPIC), the local flagship of Hong Kong-based conglomerate First Pacific Co. Ltd., also closed higher yesterday by 4.28 percent at P3.65 each share. Pangilinan is managing director of First Pacific.

Talks of a possible sale by the Lopez group of its shares in Meralco resurfaced following reports quoting the family’s patriarch Oscar Lopez to have said that they are willing to sell their remaining Meralco shareholdings if they get an attractive offer and if funds are immediately needed to pay down debt.

 “The renewed speculation that the Lopezes are nearing a sale will keep Meralco actively traded, “ said AB Capital Securities Inc. Food, beverage and packaging conglomerate San Miguel, which is diversifying into heavy industry, earlier said it was ready to buy the Lopez family’s remaining stake in Meralco, a deal that may be worth over $700 million. San Miguel president Ramon S. Ang said the conglomerate would partner with a Japanese Group to bid for the Lopez Group’s shareholdings.

The Lopez family, however, has not yet offered its remaining shares to any investor, pointing out that Pangilinan’s group has the right of first refusal over its shares.

Just last week, Pangilinan said MPIC is still open

to acquiring more shares in Meralco “ to position itself as a strategic

shareholder” in the power distributor.

The Lopez family sold a 20 percent block to a unit of Philippine Long Distance Telephone Co. for $414 million. Meralco has become an attractive target for both San Miguel and PLDT as both firms can piggyback on its retail electricity network

to offer telecommunications services.