Philippine Long Distance Telephone Co. (PLDT) is set to transfer its shares in Manila Electric Co. to a holding firm it co-owns with sister firm Metro Pacific Investments Corp.
PLDT’s wholly owned subsidiary PLDT Communications and Energy Ventures Inc. (PCEV), formerly Pilipino Telephone Co., would sell its Meralco shares to Beacon Electric Asset Holdings for P220 per share.
This is 10 percent lower than Meralco’s closing share price on Wednesday of P245 apiece. The power distributor’s share price fell 5.6 percent on this news.
“The price of P220 was based on a discount to the 15-day weighted average share price of Meralco, Meralco’s share price targets as published by various equity research analysts and comparable market transactions,” PCEV said.
PCEV will transfer the 68.8 million shares, or about 6.1 percent of Meralco’s outstanding stock worth about P15.14 billion, to Beacon Electric.
In exchange for the shares, PCEV said it would subscribe to P15.14 billion worth of preferred shares to be issued by Beacon Electric. The preferred shares carry a 7-percent dividend rate, subject to the availability and retained earnings.
Upon completion of this deal, PCEV will no longer have any direct holdings in Meralco. It will, instead, hold shares in Beacon Electric.
In a separate disclosure, MPIC president Jose Lim said the acquisition of shares from PCEV brings Beacon Electric’s economic and voting interest in Meralco to 45.352 percent. This makes Beacon Electric the single-largest shareholder of Meralco.
“It consolidates the wider group’s holdings into Beacon Electric so that both MPIC and PCEV shareholders enjoy the full value of our Meralco investment,” the company said.
PLDT, through PCEV, and MPIC each own 50 percent of Beacon Electric.
The PLDT group initially bought into Meralco to block the entry of San Miguel Corp., which earlier tried to take over the company.—Paolo G. Montecillo