OIL INDUSTRY EXecutives were caught completely off guard by the Palace-issued executive order mandating that prices of petroleum products be reduced to their Oct. 15 levels, or roughly P2 lower before yesterday’s grudgingly implemented rollback.

According to our source, industry stakeholders met last week with Justice Secretary Agnes Devanadera, who concluded that any price cap on petroleum products would violate the Oil Deregulation Law and, thus, would have no legal leg to stand on—a position seconded by Energy Secretary Angelo Reyes.

But lo and behold, Malacañang issued the EO anyway, in a move calculated, our source said, to win the public’s nod as being seen “doing something” about rising prices (never mind that world crude oil prices have spiked up sharply).

Our source added that Malacañang is relying on the oil firms to seek a restraining order from the courts (which will most likely be granted), so as to leave the former smelling like roses ... and the latter holding the proverbial public opinion bag. Nice move.

Meanwhile, industry insiders where not surprised to see other oil firms quickly implement a rollback, noting that some of them were receiving “the best kind of state subsidy” of all: Duty-free importation. Daxim L. Lucas

Midas’ touch returns

THE GROUP of Manuel V. Pangilinan has bagged the last missing piece in the convergence strategy of its growing empire with a deal to acquire 75 percent of third largest television network ABC 5. But this has also created loose ends that must be tied up, analysts said.

Will MVP’s group give up its bid for a controlling stake in third biggest broadsheet Philippine Star, given the constitutional ban on any single group owning three media formats? Or will the radio operations of ABC 5 be carved out of the buyout deal? Or will the group—through MediaQuest, a unit of PLDT Beneficial Trust Fund—henceforth come in and stay only as a minority investor in Philstar like in niche broadsheet BusinessWorld?

Another nagging question, according to some stock analysts, is how this foray into broadcasting could henceforth affect MVP’s relationship with the Lopezes, given the expected friction it could create (a la “Kapamilya” versus “Kapuso” war), especially if the 13.4-percent remaining stake in Manila Electric Co. isn’t in the bag yet (maybe only half of it is, as patriarch Oscar Lopez recently confirmed). In any case, MVP’s group is seen in a good position to challenge the ABS-CBN/GMA 7 broadcasting duopoly given its financial resources and vast telecom infrastructure.

On the technical side, some say that MVP’s group may still need to secure congressional approval for change of majority control under ABC 5’s franchise.

Meanwhile, MVP seems to have shrugged off the overhang created by Sen. Ping Lacson’s recent revelations and is again creating excitement in the stock market—particularly on Meralco, Philex Mining and, most recently, Prime Media Holdings Inc., which is widely seen as a potential backdoor listing vehicle for ABC 5. Doris C. Dumlao

Meralco nearly a “done deal”

THE SALE by the Lopezes of another 6.7-percent stake in Manila Electric Co. is almost a “done deal” except for the final pricing. And this time around, Meralco chair Manolo Lopez—previously left out of the deal with Philippine Long Distance Telephone Co.—is privy to the negotiations.

But he has consented to the sale of only half of the remaining Lopez stake, according to our Meralco source. So there goes the reason why the clan isn’t selling out of the country’s power retailer entirely (making us wonder what they really have in mind).
The Manuel V. Pangilinan-led First Pacific Co. Ltd. of Hong Kong, for its part, is said to be raising more funds on top of a recent rights offering. After all, it’s not only Meralco that the group is busy with.

With the looming acquisition of additional Lopez shares, the First Pacific group, which already owns 34.7 percent of Meralco (20 percent through PLDT and 14.7 percent through Metro Pacific Investments Inc.) will breach the tender offer trigger. But the question is, will the group make a tender offer or find a way to get exemption from the Securities and Exchange Commission?

In any case, Lopez-related stocks are rising in anticipation of a forthcoming deal. The clan is expected to generate between P14.74 billion and P17 billion from the sale of the 6.7-percent stake, based on an assumed price range of P200-P230 a share. Doris C. Dumlao