MVP finalizes Meralco stake consolidation

Business Mirror
THURSDAY, 20 OCTOBER 2011 19:40 MIGUEL R. CAMUS / REPORTER


THE group of Manuel V. Pangilinan has completed the full consolidation of its near-controlling stake in Manila Electric Co. (Meralco) under holding firm Beacon Electric Asset Holdings Inc., taking advantage of the slide in the utility’s share price.


Beacon, a 50-50 venture between listed firms Metro Pacific Investments Corp. (MPIC) and PLDT Communications and Energy Ventures Inc. (PCEV), acquired the remaining 6.1 percent Meralco stake held by PCEV for P15.136 billion, separate disclosures showed on Thursday.


Based on the transaction, Beacon acquired the stake at P220 per share, which was based on a discount on Meralco’s 15-day weighted average, PCEV said.  Meralco shares declined 2.28 percent to P240 each.


This brings Beacon’s ownership in the power retailer to 45.35 percent, further bolstering its status as the single biggest shareholder in the company.  The transaction is expected to close in the “next few days,” an MPIC spokesperson said on Thursday.


To acquire the shares, Beacon will issue 1.199 billion preferred shares to PCEV valued at the acquisition cost. The preferred shares will pay a dividend rate of 7 percent per annum.


“[The transaction]  consolidates the wider group’s shareholdings into Beacon Electric so that both MPIC and PCEV shareholders enjoy the full value of our Meralco investment.”MPIC and Beacon president Jose Ma. K. Lim said in a statement.


The ownership consolidation comes as Meralco ventures into power generation, which is expected to cost up to $2.3 billion involving the creation of 1,500 megawatts of capacity through 2016.


MPIC chief finance officer David Nicol said in a previous interview that Beacon may further increase its ownership in Meralco, although it will be careful not to bring this over 50 percent.


MPIC, a holding firm with interests in toll roads, water infrastructure, hospitals and power, slid 1.63 percent to P3.01 each on Thursday.


PCEV, a former telecommunications provider with a public float of 0.5 percent, did not move at P5.95 each. MPIC and PCEV are units of Hong Kong-listed conglomerate First Pacific Co. Ltd., where Pangilinan is also chief executive officer and managing director.