Biz Buzz: Frenemies in the skies
The race to the skies between corporate Philippines’ most famous frenemies has sizzled again as negotiations between the family of tycoon Lucio Tan, aka “Kapitan,” and the group of San Miguel Corp. president Ramon S. Ang, aka “RSA,” seems to have hit a stumbling block.
A reliable source from the seller’s camp said the tycoon was no longer closing his doors to Plan B involving the group of Manuel V. Pangilinan who, as we cited before, was poised to top SMC’s offer.
According to our source, the potential deal-breaker is a loan from the PNB/Allied Bank group that RSA wants to exclude from the transaction. This has made Kapitan rethink a prospective team-up with SMC (but this is something that’s not insurmountable, our source said, given that the loan of less than $100 million isn’t that too big for RSA’s group to chew).
And because RSA still enjoys exclusivity rights and is favored by Kapitan’s brother, Harry Tan, our source says he’s still the front-runner in this race.
RSA’s offer of $500 million for 49 percent of the flag carrier, albeit with management control, is also also in line with the tycoon’s lock-stock-and-barrel asking price of $1 billion.
Meanwhile, MVP had been in exploratory talks with the seller’s group for a long time but only made a firm offer recently, our source said.
Apart from the PNB/Allied Bank loans, which MVP will likewise face, assuming the talks with SMC fail and he gets the upper hand, our source said the overhang from his budding friendship with rival tycoon John Gokongwei remains.
But family members who favor MVP, our source said, are now trying to convince Kapitan that it should no longer matter to whom he sells the storied flag carrier.
This February is seen as crucial on whether it’s a go for SMC to bring home the bacon or whether it will become MVP’s turn to seize the day.—Doris C. Dumlao
Speaking of which…
There is also another story as to why talks for the sale of Philippine Airlines have slowed down.
Word on the street is that MVP has suddenly become “very interested” in PAL, just a few weeks after virtually conceding the race for the flag carrier to RSA.
San Miguel’s exclusivity agreement with PAL owner, Lucio Tan, didn’t stop MVP from making a bid for the airline.
According to our sources, the MVP group has supposedly submitted a bid of around $700 million for 100 percent of the airline, which is lower—valuation-wise—than the $500 million that RSA has offered for 49 percent of PAL.
So why is Kapitan taking his time in deciding, all of a sudden? Apparently, one of the taipan’s closest advisers is asking him to take a closer look at MVP’s offer, mainly because this adviser is not particularly fond of San Miguel’s big boss.
MVP’s newfound interest in PAL is also due, we’re told, to the encouragement being provided by one of his new business partners who wants to dominate the airline industry. Whom will Kapitan favor? Abangan.—Daxim L. Lucas
Dreaded mining EO
After several years, Philex Mining seems to be gaining progress in talks to buy into Manila Mining, thus getting a stronger foothold directly in this company after breaking into the Kalayaan project.
Industry sources said a potential block seller—who may or may not be mining magnate Felipe Yap himself—is in talks with Philex, which in turn could pave the way for MVP’s acquisition of a board seat. It’s a slow but sure way of scaling up interest in Yap’s crown jewel.
But it remains to be seen whether this deal—or any other mining merger and acquisition deal in the pipeline—would be affected by a rumored soon-to-be issued executive order from Malacañang, which is now sending chills down the industry’s spine. As the rumored EO is seen mapping out a policy favoring anti-mining groups, further M&As that unlocked great values out of mining and made the sector an outperformer at the stock market last year are now seen to be on shaky ground. That’s the proverbial regulatory risk for you.—Doris C. Dumlao
Not so prudent
Beleaguered Prudentialife Plans Inc. apparently does not want to call it quits despite losing its license as a pre-need firm in 2009.
The company, in fact, was quite active (until recently, that is) as a member of the Philippine Federation of Pre-Need Plan Companies, which has 18 other members. The current set of officers and directors are in the second year of their three-year term, and Prudentialife has two representatives in the roster—company president Jose Alberto T. Alba is director for the federation’s education plan group while Jose M. Gonzales Jr. is federation secretary.
Last week being Pre-Need Consciousness Week, Prudentialife officials participated in a thanksgiving Mass early Monday morning. Unfortunately, it officially received a copy of the Insurance Commission’s order indefinitely suspending payments on claims that same morning.
Prudentialife would have none of liquidation proceedings and wants to continue its life plan business and transfer its education and pension plan business to another firm. Still, the order sent shock waves to Prudentialife’s thousands of planholders, seemingly with a backlash to the company and all those who represent it.
Finance Secretary Cesar V. Purisima, in a talk during a forum organized by the pre-need federation last Friday, described an encounter with one of the leading agents of Prudentialife.
“She was so desperate, so worried for the life of her sub-agents because she said that they’ve sold these products to powerful people who will not take this sitting down,” Purisima said. In his speech, which turned out to be a dressing down, Purisima warned industry players against relying too much on power-laden entities, including the media.
Of course, all those warnings and assurances may have been lost on those who needed them most that morning. Prudentialife officials have made themselves scarce since that fateful Monday. According to a member of the federation staff, none of them appeared for a CSR activity on Wednesday and for the luncheon on Friday, despite their responsibilities in the federation.—Ronnel Domingo
Unqualified?
A storm is brewing at the Philippine Merchant Maritime Academy. An anonymously sent e-mail has been circulating among graduates, e-mailing lists of PMMA Alumni, officials and among candidates asking about the qualifications of the new PMMA president appointed last January 10 and installed last January 18.
The issue raised was: What is the minimum qualification for the position of PMMA president?
It was alleged that the recently appointed president only holds a 3rd Mate license (contrary to the understanding of the other candidates that one of the minimum qualifications for the position is for the appointee to be an experienced master mariner or chief engineer). The newly appointed official supposedly possesses neither.
The PMMA is under the jurisdiction of the Commission on Higher Education, which is responsible for ensuring that all appointees to schools under its ambit meet the standards required for them to deliver quality education.
The demand for a steady supply of well-trained, capable and dedicated manpower in the maritime industry is projected to increase in the coming years. Career opportunities in the maritime industry run aplenty, including jobs in shipping agencies, chartering and shipping line management, cargo terminal operations, freight forwarding and warehousing.
Of course, there is a perception that a maritime career is an unglamorous one, often associated with hard work and tough working conditions. But this is not completely true as the maritime industry is not just about physically operating ships or port facilities, but a diverse industry that requires a whole spectrum of talents at all levels, from the operational level to tertiary and even postgraduate levels, in a variety of fields.
There should be no room compromise, including at the PMMA.—Margie Quimpo-Espino
Still loaded
No, the Araneta clan is not down on its luck. And no, patriarch Jorge L. Araneta has not sold the jewel of the family’s real estate holdings—the Araneta Coliseum.
And yet, employees of the Araneta group continue to ward off persistent questions—from suppliers, customers, loyal clients and business partners—on the supposed new ownership of the group.
These concerns arose following the renaming last year of the coliseum into the Smart Araneta Coliseum.
The Araneta group and Smart Telecommunications Inc., led by businessman Manuel V. Pangilinan, signed last year a five-year naming rights deal, which gives Smart increased exposure and the Araneta group another source of revenue.
Araneta says the Araneta Coliseum loyalists may have been taken aback by the new name but says that naming of sports and entertainment venues after corporations is not unusual. In fact, it’s the regular practice in the United States and Europe.
Perhaps people just need more time to get used to seeing Smart in the name space as Araneta Coliseum.—Tina Arceo-Dumlao
