POSTSCRIPT / June 18, 2009 / Thursday


Philippine STAR Columnist

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SMC still plotting to capture Meralco?

NOT OVER YET: After the battle royal for control of the Manila Electric Co. (Meralco) resulted in what looked like a mutual admiration club of a triumvirate of business titans, the question lingers if indeed the war is over.

There are still discernable moves to sow intrigue and divide members of the Lopez family and drive a wedge between them and their new ally, chairman Manuel V. Pangilinan of the Philippine Long Distance Telephone Co.

The Lopezes were thought last May to be on the verge of losing the family heirloom to San Miguel president Ramon Ang who came to the annual stockholders’ meeting armed with the 27-percent shares of the Government Service Insurance System previously committed to MVP.

But Pangilinan saved the day. By buying shares from the Lopez group, he boosted to 30.2 percent his 10.2 percent bought earlier in the open market. Emerging as the biggest stockholder, he gained enough leverage to keep the chair for Manolo Lopez.

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SAME COIN: The pleasant paradox for the Lopezes is that by selling to Pangilinan a majority of their stake, the family saw their remaining 13-percent become more valuable than their previous total of 34 percent.

It is obvious that Ang has not gotten over his failure to capture the power distribution giant whose business jibes with other concerns of San Miguel. His flashing smiles and singing praises for Pangilinan and Manolo Lopez could be misleading.

The GSIS acted as a battering ram of San Miguel. Lopez patriarch Oscar Lopez himself observed that Ang was just continuing where GSIS boss Winston Garcia had left off. It did not help that Ang was heard to brag that he had Manolo Lopez in the palm of his hand.

Former Ombudsman Simeon Marcelo has commented also that Garcia and Ang are just two sides of the same coin.

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MOVE PAYS OFF: The sale of a big block of Lopez shares to Pangilinan was a sacrifice move that has paid off for both.

The transaction enabled First Philippine Holdings Corp., the Lopez parent firm, to whittle down its $400-million-plus debt incurred when it bought shares from its former Spanish partners Union Fenosa and the Meralco Pension Fund.

In addition, the Lopezes’ aligning themselves with Pangilinan blocked the hostile San Miguel intrusion. It saved not only the chair but also the face of the Lopezes.

Meralco has been thought of as a political and financial burden for the Lopezes, especially with the critical stance of its sister broadcast firm ABS-CBN towards Malacañang. It has been assailed by controversy and multibillion-peso refunds.

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EXCHANGE DEAL?: Curiously, Ang told the media that First Pacific has offered to buy out San Miguel’s 27-percent stake in Meralco through a swap of its interests in the tollways and the water distribution businesses.

He was referring to Maynilad Water Services Inc. and Metro Pacific Tollways Corp., operator of the North Luzon Expressway. Through its local infrastructure holding unit Metro Pacific Investments Corp. (MPIC), First Pacific holds controlling interests in the two firms.

San Miguel has disclosed to the Philippine Stock Exchange that the PLDT, controlled by Metro Pacific, “has expressed an interest to acquire” the SMC shares in Meralco.

Ang told reporters last June 5 that San Miguel intended to be in Meralco for the long haul, but could entertain any “spectacular” offer that comes its way. He reiterated that although SMC was not selling its stake in Meralco, it was open to talks with First Pacific.

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NOT FOR SALE/SWAP: Ang appears to be still smarting from his failure to capture Meralco after that spirited campaign in tandem with Garcia of GSIS.

With only SMC’s 27-percent share (still technically owned by GSIS), Ang is unable to outvote the combined clout of the Lopezes (13.4 percent) and Pangilinan (30.2 percent).

But Metro Pacific has denied offering to swap its interests in Maynilad Water and the North Luzon tollway for San Miguel shares in Meralco.

“Both Maynilad and NLEx are key strategic investments for Metro Pacific… they are not available for sale or for trade with other assets,” Pangilinan said. “It is fully our intention to keep these assets in our portfolio for the long term.”

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MVP-LOPEZ TIES: Pangilinan continues to firm up his ties with the Lopezes. He has named to PLDT’s advisory board Manolo Lopez and former Chief Justice Artemio V. Panganiban, who sits as an independent director on Meralco’s board and a Lopez firm.

MVP said: “We are exploring opportunities in prepaid electricity, wireless bill payments, and meter reading using wireless telemetry. We also want to work with Meralco in such areas as broadband over power lines, bill statement printing and enveloping for Meralco’s 4.6 million customers and our 2.1 million post-paid customers, and facilitation of easements and rights of way.”

Asked why Lopez was named to PLDT’s advisory board, Pangilinan said this promotes mutually beneficial cooperation between the two companies.

The PLDT group owns a 10.2-percent stake in Meralco via the PLDT Beneficial Trust Fund, the ownership of which will be transferred to Metro Pacific Investments Corp. very soon.

Pilipino Telephone Inc. (Piltel), PLDT’s wireless subsidiary, is acquiring another 20-percent stake in Meralco from the Lopez-owned First Philippines Holdings worth P20 billion. The acquisition is set to be presented for ratification at the shareholders’ meeting on June 30.

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(First published in the Philippine STAR of June 18, 2009)

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