SMC said to be a step closer to sealing PAL deal

San Miguel Corp. has gone on record to say that negotiations are under way for the acquisition of a substantial stake in national flag carrier Philippine Airlines, which is currently controlled by the group of tycoon Lucio Tan.

But in a separate disclosure Wednesday, PAL’s parent company, PAL Holdings Inc., denied any such negotiations had taken place.

“We confirm that the company was invited by Mr. Lucio Tan, the controlling stockholder of PAL Holdings Inc., to participate and assist in the refleeting and modernization of the aircraft of Philippine Airlines in preparation for the projected heavy influx of tourists in the coming years, which will be beneficial to the tourism industry of the country,” San Miguel said Wednesday in its disclosure to the Philippine Stock Exchange.

“In the event a definitive agreement is concluded, an appropriate disclosure shall be made to the exchange,” San Miguel added.

On the other hand, PAL said in its disclosure that “there is presently no discussion on possible investment by San Miguel Corp. in PAL Holdings Inc.”

While SMC is said to be interested in the airline operations of PAL Holdings’ subsidiary, Philippine Airlines, it is uncertain whether the conglomerate’s investment will reach the parent company level.

Nevertheless, shares of PAL Holdings have risen in the last two days as the entry of a new investor is seen to boost its operations.

On Wednesday, shares of PAL Holdings rose by 0.86 percent to P7.03 apiece, giving the holding company a market capitalization of P37.79 billion. Its share price recently surged by 15.8 percent ahead of reports that San Miguel president Ramon S. Ang had reached the closing stage of negotiations to buy into the airline.

Also on Wednesday, SMC shares closed 0.51 percent lower to P117.50 apiece, giving it a market capitalization of P276.75 billion.

Some sources said the tycoon had been willing to let a new investor come in for at least $1 billion, part of which would cover refleeting costs.