MVP sets 51% limit on Meralco stake

MANILA, Philippines - Publicly-listed Metro Pacific Investments Corp. (MPIC), the flagship firm of the business empire headed by Manuel V. Pangilinan, is set to limit its interest in utility giant Manila Electric Co. (Meralco).

Pangilinan, who serves as chairman of both MPIC and Meralco, told reporters in a chance interview that the holding firm intends to limit its stake in the electricity distributor within the  tender offer requirement.

“We want to keep Meralco a listed company so we would prefer not to breach the limits on the requirement for a general offer,” Pangilinan said.

Under the Securities Regulation Code, any entity that acquires more than 51 percent of a listed company must offer to buy the remaining shares held by minority investors for the same price.

This law aims to protect investors by allowing them to divest from a company when there is a significant change of ownership that may affect the way it operates.

When asked if MPIC would acquire 51 percent of Meralco, he said the holding firm does not want to exceed the limit on the tender offer rule. “Something like that,” he added.

MPIC is the single largest shareholder in Meralco with a 48.3 percent interest through wholly owned subsidiary Beacon Electric Asset Holdings Inc.

Last July 19, MPIC took up about 15 percent to 16 percent of the 64.3 million Meralco shares worth over P17 billion sold by diversified conglomerate San Miguel Corp. (SMC).

San Miguel Corp (SMC) now owns 28.52 percent of Meralco.

The shares sold account for over five percent of SMC’s 32.8 percent stake in Meralco. The diversified conglomerate acquired its Meralco stake five years ago for around P90 per share or just a third of the power firm’s current stock price.

The Government Service Insurance System (GSIS), the country’s largest pension fund, reportedly bought a significant chunk of the offered shares, which represent 5.7 percent of the power firm.

In a disclosure to the PSE, MPIC vice president for corporate communications Melody del Rosario said the holding firm through Beacon Electric owns less than 50 percent of the outstanding capital stock of Meralco.

“We wish to clarify that with the additional shares acquired from SMC, Beacon Electric will own less than 50 percent of the outstanding capital stock of Meralco,” del Rosario said.

She told the PSE that Beacon Electric - a special purpose company jointly owned by MPIC and PLDT Communications and Energy Ventures Inc. – acquired 10 million of the 64.3 million shares sold recently by SMC.

Meralco serves the power requirements of 25 percent of the Philippine population, accounting for half of the nation’s gross domestic product.

The power utility firm is venturing into power generation. It has acquired a controlling 70 percent interest in GMR Energy, which is in the advanced stage of construction of a 2 x 400 megawatt liquefied natural gas comobined cycle combustion turbine power plant located in Jurong Island, Singapore.

Meralco is also eyeing opportunities in Indonesia, Myanmar, Thailand and Vietnam. – With Zinnia dela Peña, Iris Gonzales