First Pacific to keep shares in Meralco just under 51%

First Pacific Co. Ltd. of Hong Kong appears reluctant to breach the tender offer rule that requires it to make an expensive buyout offer to minority shareholders of Manila Electric Co., where it recently acquired additional shares, CEO Manuel V. Pangilinan yesterday said.

First Pacific, through Beacon Electric Asset Holdings Inc., owned 48.34 percent of Meralco as of the end of June.

Last week, Beacon Electric acquired 10 million more shares from a block sold by San Miguel Corp.

With this acquisition, First Pacific’s stake in the power distributor increased to a little over 49 percent, bringing it closer to the tender offer threshold of 51 percent.

“We want to keep Meralco a listed company so we prefer not to breach the limits of the requirement for a general offer,” Pangilinan yesterday told reporters.

Pangilinan declined to say whether he would buy more Meralco shares, although the gap between Beacon’s current stake and the tender offer threshold suggested that there was some room for him to do so.

San Miguel last week sold off 64.33 million shares, or 5.7 percent of Meralco at P270 apiece.

The conglomerate raised P17.4 billion from the offer.

State-run Government Service Insurance System also participated in last week’s offer by San Miguel.

Before the sale, the San Miguel group owned 33 percent of Meralco.

The conglomerate had indicated that it was raising funds to support its diversification away from food and drinks and into businesses like power, oil refining, toll roads and airlines, which San Miguel said would deliver higher returns.

But even with its minority stake, First Pacific has been exercising control in Meralco through its alliance with the Lopez family, which still controls about 4 percent of the electricity distributor.

Beacon is jointly owned by First Pacific units Philippine Long Distance Telephone Co. (PLDT) and Metro Pacific Investments Corp.

PLDT is the country’s largest telecommunications provider while Metro Pacific is engaged in water distribution and toll roads, through Maynilad Water Services Inc. and North Luzon Expressway, as well as hospital operations.