MVP group may increase stake in Meralco to 46%

MANILA, Philippines - The group led by telecommunications magnate Manuel V. Pangilinan is looking to jack up its stake in power utility giant Manila Electric Co. to around 45 or 46 percent.

In an interview, Metro Pacific Investments Corp. chief finance officer David Nichols said the group’s plan though would have to wait, pointing out they are already near the threshold at which they would have to launch a formal bid for the whole power retailing giant.

“Over time, we want to get a bit more... I think 45 or 46 percent that would be pretty good. But it’s an aspiration. Not a plan. We’re not in negotiations with anybody else,” Nichols said.

 “We can’t do anything because we are already at the takeover threshold. We can’t do anything until next March or April at the earliest,” Nichols added.

The tender offer rule states that any entity or person who acquires at least 35 percent of a listed company must offer to buy out other shareholders at the same price agreed upon with the block seller.

In the case of creeping acquisitions, the mandatory tender offer rule shall apply only to purchases made over a period of 12 months as provided by the Securities Regulation Code.

The tender offer rule aims to protect minority shareholders from the possible dilution of their shares by giving them a chance to get out of the company.

The Pangilinan-led group currently owns around 41 percent of Meralco through Beacon Electric Assets Holdings and Pilipino Telephone Corp.

Beacon was a holding firm jointly set up by MPIC and Piltel to become the single biggest stockholder in Meralco. Diversifying conglomerate San Miguel Corp. directly holds a 27-percent stake in the country’s largest power firm.

MPIC, the local flagship of Hong Kong-based conglomerate First Pacific Co. Ltd. acquired an additional 6.6 percent of Meralco from the Lopez family in March for P300 each share or a total of P22.4 billion. This after MPIC exercised its right of first refusal and matched the P300 per share offer of Triratna Holdings, a private firm led by Henry Sy Jr.

Meralco closed at P221 each share Friday, up P4 or 1.84 percent from its previous close of P217.

Nichols said Meralco is in talks with several possible partners for its planned venture into the power generation business, which shall be undertaken to a soon-to-be formed subsidiary, Meralco Power Generation Co. The retailing giant is planning to spend around $2 billion to put up power generations plants with a total capacity of 1,500 megawatts to ensure steady supply within its franchise area.