PLDT unit consolidates all Meralco shares into affiliate firm

Business World Online
Posted on October 20, 2011 09:18:07 PM


A PHILIPPINE Long Distance Telephone Co. (PLDT) unit has completed transferring all its shares in Manila Electric Co. (Meralco) to Beacon Electricity Holdings, Inc., now the biggest shareholder in the distribution utility.
PLDT Communications and Energy Ventures, Inc. (PCEV) transferred its remaining 68.8 million shares in Meralco to Beacon Electric, a special purpose vehicle jointly owned by the PLDT unit and the telco’s shareholder Metro Pacific Investments Corp.


With the share transfer, PCEV no longer has any direct shares in the utility and Beacon Electric now owns 45.35% of Meralco.


The shares were priced at P220 a piece, totaling to P15.14 billion.


“The price of P220/share was based on a discount to the 15-day weighted average share price of Meralco, Meralco’s share price targets as published by various equity research analysts, and comparable market transactions,” PCEV said in a statement yesterday.


PCEV also subscribed to 1.199 billion preferred shares of Beacon Electric for P15.14 billion, the statement read further.


“The acquisition of these shares from PCEV… consolidates the wider group’s shareholding into Beacon Electric so that both Metro Pacific and PCEV shareholders enjoy the full value of our Meralco investment,” Jose Ma. K. Lim, chief executive of Metro Pacific and president of Beacon Electric, said in a statement.


Metro Pacific and PCEV had already transferred a combined 28.2% stake in Meralco to Beacon Electric last year.


The Lopezes continue to hold a 6.6% interest in Meralco.


“The transfer is akin to moving houses, basically the impact will only be shared by the same people,” said Claire S. Quiray, analyst at Regina Capital Development Corp. in a telephone interview.


“The party I see benefitting the most here however is Beacon Electric because it’s valuation will go up,” Ms. Quiray said.


She added players who have shares in Meralco are increasingly consolidating their hold in the utility “because it is one of the biggest money makers in the bourse.”


For the first half of the year, PCEV saw its core net income grow 18% to P1.3 billion from P1.1 billion.


Its reported net income however fell 2.1% to P853 million from P871 million.


Meralco’s reported net income meanwhile rose by 26% to P6.09 billion in the first half of the year from P4.9 billion in the same period last year.


Core net income of the utility went up 35% to P7.8 billion in the period of January to June from P5.8 billion.


Shares of Meralco closed at P240, down 2.28% from its previous close of P245.60 a piece.


PCEV shares, last traded Oct. 14, closed at P5.95 a piece.


Mediaquest Holdings, Inc., a unit of the Beneficial Trust Fund of PLDT, has a minority stake in BusinessWorld. -- Emilia Narni J. David