MANILA, Philippines — The group of Manuel V. Pangilinan has moved to defend its interest as the single biggest voting block in power retailer Manila Electric Co. (Meralco) by matching a buyout offer made by a son of tycoon Henry Sy to the Lopez family.
In a statement Thursday night, the Lopezes’ First Philippine Holdings Corp. (FPH) said the Pangilinan-led Metro Pacific Investments Corp. (MPIC) had exercised its right of first refusal and matched Henry Sy Jr.’s offer of a Meralco valuation at P300 per share.
However, FPH has agreed to sell only 6.7 percent or half of its remaining stake in Meralco.
The deal was structured in the form of a loan and a one-year call option, which analysts said was meant to seek an exemption from a costly tender offer.
The offer of the Sy-led TriRatna Holdings Corp. (TriRatna) and the counteroffer of MPIC were taken up by FPH in a meeting Thursday.
There won’t be an outright transfer of shares. Instead, there will be a short-term loan of P11.20 billion by MPIC to FPH or its wholly owned subsidiaries.
The loan will be backed by a promissory note which will mature on March 31, 2010, and will have an interest of 5 percent per annum—exactly a year after Pangilinan’s group through Philippine Long Distance Telephone Co. first entered into a deal to buy out the Lopez family’s 20 percent stake in Meralco.
The loan will be secured by the Lopezes’ shares in Meralco and First Gen Corp. There will be a call option granted to MPIC by FPH on 74.7 million common shares, 6.7 percent of the outstanding common shares of Meralco.
The transaction between MPIC and FPH follows the process in the investment and cooperation agreement between the two parties signed in March.
The deal will jack up the stake of the Pangilinan group to 41.4 percent if and when the call option is exercised.
Its corporate rival San Miguel Corp. remains an influential voting block in Meralco with a 27-percent stake. Global 5000 Investments Inc., an allied group led by businessman Roberto Ongpin, has voting rights equivalent to 7-10 percent.
