Metro Pacific 'exploring' purchase of Ayala Corp.’s LRT-1 stake

Back in mid-January, news broke that Ayala Corp. [AC 714.50, up 0.6%] [link] was looking to sell its 35% stake in Light Rail Manila Corp. (LRT-1) to the Villar Group, but that AC’s co-investor, Metro Pacific Investments (MPI), had the right of first refusal under its shareholders agreement. Now comes news from MPI that it is “interested” [link] in exercising its right as buying AC’s stake in LRT-1 would “make it easier for [MPI] to move if [LRT-1] were majority-owned, fully under the control of MPIC.” AC is selling its 35% stake in LRT-1 to re-align its portfolio away from infrastructure and toward property, telecom, and energy. MPI already has a 35.8% stake in LRT-1, so acquiring the AC stake would give MPI a 70.8% stake and complete control of LRT-1. 

MB bottom-line: It sounds like this is related to MPI’s interest in bidding for the operations and maintenance contract of MRT-3, which the Department of Transportation has said would be privatized before the existing contract expires next year. It’s not clear to me how having control of LRT-1 improves MPI’s bid on MRT-3, but I guess having more influence and control in a niche infrastructure sector can’t hurt. Are any of MPI’s old shareholders upset to see this kind of action just after they were pushed out by MPI’s delisting effort? For all of MPI’s noise since its early Q4 delisting, it hasn’t done anything tangible that could give those shareholders anything to regret. Yet.

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