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Pangilinan group hikes Meralco stake to 48%

Rappler.com
The group led by businessman Manuel V. Pangilinan acquired additional 2.66% stake in power giant Manila Electric Company (Meralco) from the Lopez group for P8.85 billion

MANILA, Philippines – The group led by businessman Manuel V. Pangilinan acquired additional 2.66% stake in power giant Manila Electric Company (Meralco) from the Lopez group for P8.85 billion.

In a disclosure to the stock exchange on Tuesday, January 24, Metro Pacific Investment Corp (MPIC) announced that its unit, Beacon Asset Holdings Inc., purchased 30 million Meralco common shares for P295 each from the Lopez-led First Philippine Utilities Corp. (FPUC).

This new transaction will hike the Pangilinan group’s stake in Meralco to 48.02% from 45.36% and will reduce the Lopezes’ stake to 3.9%.

“The acquisition of the additional 2.66% of Meralco from the Lopez Group represents an opportunity to further consolidate Beacon’s investment in a sector that the Beacon Group believes will have significant growth as the Philippine economy grows,” MPIC said in a statement.

“Meralco is now focused on growing its current business and in investing in new areas such as power generation, aimed at enhancing shareholder value and providing efficient and upgraded services for the public,” it added.

Agreement

The sale is part of a 2009 agreement between the 2 groups to prioritize each other in any transaction.

FPUC’s parent, First Philippine Holdings Corp, first sold a 20% stake in Meralco to the Pangilinan group in 2009, assuring the Pangilinan group of control of the country’s biggest power distribution firm, then being pursued by other business groups, particularly diversifying conglomerate San Miguel Corp.

The Lopez group then sold additional shares to Pangilinan’s group in two more transactions in 2010, cementing further Pangilinan’s grip on Meralco.

The Lopez group ceded control of Meralco to raise funds to pay debts on its power generating units, which is the focus of the group now.

The groups amended their agreement to allow the Lopezes to still retain a board seat in Meralco.

Under the Pangilinan group are telecommunications giant Philippine Long Distance Telephone Co. (PLDT) and infrastructure giant MPIC. Both are part of Hong Kong-based First Pacific Co. Ltd.

The Pangilinan has consolidated its stake in Meralco through Beacon, which is owned by MPIC and PLDT Communications and Energy Ventures, Inc. (PCEV) on a 50%-50% basis.

MPIC said it will pump P2.7 billion into Beacon to help fund purchase, which will be finalized on February 1, 2012. – Rappler.com