PLDT retirement fund acquires 10.17% of Meralco
By Liza Reyes and Carmina Reyes, ABS-CBN News | 03/09/2009 5:07 PM
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Diversified conglomerate PLDT Group, through its retirement trust fund, has acquired 10.17 percent in Manila Electric Co. (Meralco) enough for it to secure one board seat in the country's largest power retailer.
In a disclosure to the stock exchange on Monday, Meralco said the PLDT Beneficial Trust Fund, the retirement fund of PLDT employees, and its beneficially owned Virgin Islands-based holding firm, New Gallant Limited, bought a combined 113.3 million shares of Meralco.
PLDT's retirement fund and New Gallant reportedly accumulated the Meralco shares through acquisitions in the market that started in early February up to the first week of March. The value of the shares varied from as low as P62 to P123.90 per share.
The purchase comes two months before Meralco's stockholders meeting in May 26, when a battle for control is likely to ensue. In previous weeks, Meralco's share price increased almost four-fold from only P40-plus per share early this year. It reached a peak of P123 on March 6, the deadline for those who would want to vote in May 26.
The PLDT group is widely expected to ally itself with the Lopez family, Meralco's current controlling shareholder, who will potentially face a proxy war with another major shareholder, San Miguel Corporation.
With one board seat secured by PLDT, market observers told ABS-CBN News that a Lopez-Pangilinan alliance secures five seats, or majority, in the of the 11-man Meralco board. San Miguel holds four seats. There are two independent directors.
Top executives of San Miguel and PLDT have denied they are positioning to assert control of Meralco.
In an interview with ABS-CBN News, Ray Espinosa, vice chairman of the PLDT Beneficial Trust Fund, wrote, "It is important to stress that when we made this investment, it is our plan and intention to work with various shareholder groups including the Lopez family. It is not in our interest to disrupt the business of Meralco. We intend to bring Meralco to a state where it is more profitable."
PLDT and San Miguel are both in the telecommunications business. PLDT is the country's largest mobile and landline provider, while San Miguel just recently entered into a partnership with a Qatar-based telecommunications firm for broadband-based services in the Philippines.
Both are interested in Meralco's vast network of power poles where they could piggyback their telecommunications infrastructure within Meralco's franchise areas, Metro Manila and nearby towns. Telecommunications business in these areas contribute bulk of operators' revenues.
Last January, MediaQuest, the investment vehicle of the PLDT Beneficial Trust Fund, admitted it is conducting due duligence on the broadsheet, The Philippine Star, before it finalizes an estimated 85 percent acquisition in April. The deal was estimated to be worth P4 billion.
abs-cbnNEWS.com is the online news department of ABS-CBN Interactive Inc., a subsidiary of ABS-CBN Broadcasting Corp. Both are part of the Lopez Group of Companies.
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