Meralco stocks spike on reports of First Pacific's renewed interest

MANILA, Philippines - Shares of Manila Electric Co. (Meralco) spiked 6.57 percent yesterday after Hong Kong-based conglomerate First Pacific Co. Ltd. announced that its Philippine affiliate, Metro Pacific Investments Corp. (MPIC), is in talks with various parties to ramp up its equity ownership in the power utility giant to not less than 20 percent.

Meralco hit a high of P217 before closing at P211 each share yesterday or an increase of P13 from Friday’s close of P198. A total of 1.64 million shares worth about P338.85 million changed hands. 

The stock of the country’s largest power distributor hit a record high of P302.50 in July but has since fallen as investors found it overvalued. However, the stock, which has a market capitalization of P220.75 billion, has been gaining ground the past two weeks on renewed speculations the Lopezes are ready to unload its remaining 13.4 percent stake in the power firm.

Talk of a possible sale by the Lopezes of their shareholdings in Meralco re-emerged after family patriarch Oscar Lopez was quoted to have said that they are willing to sell their stake if they receive an offer too good to pass up or when immediate funding of obligations and investments are needed.

When asked whether there are ongoing talks between the Lopezes and the Manuel Pangilinan-led MPIC or any other entity regarding the family’s remaining stake in the utility giant, Jay Lopez, vice president and head of corporate communications at First Philippine Holdings Corp., the Lopez-led power investment holding firm, said: “There is nothing to disclose at this time.”

In a beneficial ownership report filed with securities regulators last week, MPIC said it currently owns 163.6 million shares in Meralco, equivalent to 14.67 percent of the power firm.

Aggregately, First Pacific’s interest in Meralco now stands at 34.67 percent inclusive of the 20 percent held by Pilipino Telephone Corp., another Philippine affiliate.

In a statement posted in its website, First Pacific said the terms of any further acquisition of Meralco shares have yet to be firmed up and agreed. “If terms are ultimately agreed (of which there are no assurance), the company would make an appropriate announcement under the listing rules at the relevant time,” First Pacific said.

MPIC earlier disclosed to securities regulators it is mulling to raise its stake in Meralco “to position itself as a strategic shareholder.”