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Buyer of govt stake seen allied with San Miguel

Shares of the power retailer Manila Electric Co. (Meralco) gained Wednesday as investors snapped up shares in anticipation of a possible battle for control of the nation’s biggest power retailer.

Global 5000 Investment Inc., which has agreed to buy the remaining 10-percent stake of government financial institutions (GFIs) in Meralco for P9.9 billion [read story], will have physical custody of the shares once it has fully paid the amount in January 2012, government sources said Wednesday.

However, the buyer will have immediate voting rights over the shares jointly sold by the state-run pension fund Social Security System and state-owned Land Bank of the Philippines and Development Bank of the Philippines.

“The shares will be held by the sellers and won’t be crossed until it’s fully paid,” a government source said.

Global 5000 has agreed to pay the three GFIs in four installments—20 percent before the end of this year, 20 percent in 2010, 20 percent in 2011 and 40 percent in 2012.

The investment fund is widely perceived as “allied” to beverage and food group San Miguel Corp. The transaction could thus tilt the balance of power in Meralco in favor of San Miguel, which bought the 27-percent Meralco shareholding of the state-run pension fund Government Service Insurance System in October.

Joseph Roxas, president of Eagle Equities Inc., said both the San Miguel group and the Lopez group that runs Meralco would likely accumulate more shares of Meralco. “They both will want to be on the safe side,” he said.

Documents with the Securities and Exchange Commission showed that Iñigo Zobel, son of the late business magnate Enrique Zobel de Ayala, chairs Glbal 5000. Roberto Ongpin, a former trade minister, is also on the investment fund’s board.

Another prominent director of Global 5000 is Joselito Campos Jr., executive director of Del Monte Pacific Ltd. and chairman and chief executive of NutriAsia Group of Companies, a major food conglomerate in the Philippines. He is former chairman and chief executive of his family’s United Laboratories, the country’s biggest pharmaceutical firm.

Analysts say that while San Miguel does not directly own shares in Global 5000, it is closely associated with shareholders of the investment group.

Zobel has been a director of San Miguel since May 1999 and a member of the company’s key committees. He is also an independent director of San Miguel Brewery Inc., Ginebra San Miguel Inc., San Miguel Pure Foods Co. Inc. and San Miguel Properties Inc.

San Miguel president and vice chairman Ramon Ang is a director of publicly listed Internet firm Philweb Corp., which is led by Ongpin.

Campos was a joint-venture partner of San Miguel before the company sold last year its minority stake in NutriAsia San Miguel Holdings Ltd., which was formed to own Del Monte Pacific Ltd., to Campos’ NutriAsia group.

Ang admitted that shareholders of Global 5000 were his “good friends,” and said San Miguel “will work with anybody for the good of [Meralco].”

The Lopez clan, which has controlled Meralco for generations, owns about 34 percent of the power distributor.

Benjamin Lopez, the son of Lopez clan patriarch Oscar Lopez and vice president of the Lopez group’s First Philippine Holdings Corp., said: “We are hoping for a more productive relationship with (San Miguel) in Meralco and sharing common objectives of improving stakeholder value. We will of course work together to manage the corporation as (San Miguel) is a significant shareholder.”

Asked to comment on the entry of Global 5000, Lopez said the Lopez family believed the private investors “will have the same objective as the Lopez family does, which is to improve shareholder value.” With editing by INQUIRER.net

• Calaca plant sale hits snag
• BPI expects bigger profit in ‘09
• OceanaGold puts Didipio project on hold
• Cost pressures drive oil profits down
• Power co-ops better off under RA 6938
• Century Properties to invest P15B in '09
• Shares close 1.4% higher
• Asian stocks, oil prices rebound
• Hanjin to push ahead shipyard project

• RP raises $1.5B from int’l bond offering
• Shares slide 1.66% lower
• Economic crisis fears return
• Forex reserves as record $37.1B
• RP less vulnerable to crisis, says Fitch
• NFA rice procurement highest since 1979
• Treasurer sees drop in interest rates
• HK fund buys 13% of Alliance Tuna
• Philex reports P800-M output