MANILA, Philippines?Shareholders of the Pilipino Telephone Corp. approved on Tuesday the company?s acquisition of a 20-percent stake in the country?s biggest power retailer Manila Electric Co. and the transfer of its cellular phone business to sister company Smart Communications Inc.

The P20.07-billion transaction involving 223 million shares of Meralco will pave the way for the transformation of Piltel from a telecommunications company into a holding company for the 20-percent Meralco stake.

Manuel V. Pangilinan, chair of Piltel and its parent company Philippine Long Distance Telephone Co., said the group has not decided yet what other assets or businesses to put into Piltel.

Piltel, for its part, has made an offer to buy out other minority shareholders at P8.50 a share.

Shareholders of Piltel also agreed to sell and transfer the company?s cellular assets, subscriber base and Talk ?N Text trademark to Smart.

The acquisition is a strategic investment for the PLDT group because of potential opportunities for operational and business synergies, and new revenue streams and cost savings for both the PLDT group and Meralco.

Pangilinan added that the PLDT group had notified the Lopez family, which sold the 20-percent stake, that the financial closing could be done by July 14 as the funds needed to pay for the acquisition have been raised.

Meanwhile, he ruled out the public listing of Smart, which accounts for about 80 percent of the PLDT group?s business, anytime soon.

He said he would like to avoid a situation where investors would put money in the wireless unit because it was more profitable than the parent company.