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MANILA, Philippines -- Hong Kong's First Pacific Co. Ltd. will acquire 20 percent of Philex Mining Corp. for P6.2 billion ($123.4 million), the country's biggest miner said on Thursday.

The acquisition by First Pacific, at a hefty 70 percent premium to the current market price, is expected to put to rest objections by state pension fund Social Security System (SSS), which owns over 18 percent of Philex.

The pension fund last month opposed a buy-in deal between Philex and First Pacific, saying existing shareholders should have the pre-emptive right to buy the shares, forcing the mining firm to offer the shares to all shareholders.

Philex told Manila's stock exchange on Thursday that shareholders only took up about 24,900 of the 778.65 million shares on offer.

First Pacific is to purchase the rest at P7.92 apiece, much higher than Philex's last traded price of P4.65.

Philex Chairman and Chief Executive Walter Brown told Reuters the fact that First Pacific would end up buying nearly all the shares offered showed that "no shareholder was irrational enough to exercise their option at a price much higher than market."

Brown said the transaction with First Pacific would be executed on the Philippine Stock Exchange on Nov. 28, adding that the Hong Kong-based conglomerate can buy more shares.

"There is an agreement for them to buy more at a future date. The next stage would be 30 percent, and then may be 40 percent," he said. "They have the option to do it."

Philex would probably be issuing new shares to be offered to all shareholders at the same price that First Pacific would buy the 20 percent stake or the market price, whichever is higher, said Brown.

In September, Philex bought out partner Anglo American Plc. in the Boyongan gold and copper project in southern Philippines for $55 million.

First Pacific is the parent of Manila-based conglomerate Metro Pacific Investments Corp. and owns part of Philippine Long Distance Telephone Co., the country's biggest telecommunications firm.

($1 = P49.965)

• Demand slump drives oil, metals down
• Mining firm nixes ‘false’ claims
• (UPDATE 2) Share close 3.45% lower

• S&P affirms RP ratings, stable outlook
• Banks still get to boost lending
• Thrift bank up for sale
• BSP ready to act to counter downturn
• Focus backs out of Tindalo venture
• BSP wants cover for forex losses
• GMA 7 expanding overseas
• IPP contracts sale pushed
• Mobile money exchange scheme launched
• Lodestar, OVMPC sign deal