MPIC hikes stake in Beacon

Infrastructure holding firm Metro Pacific Investments Corp. acquired P3.56 billion worth of preferred shares of Beacon Asset Holdings, which holds the controlling stake in power distributor Manila Electric Co., or Meralco.

The 282.21 million preferred Beacon shares were acquired by MPIC from Philippine Long Distance Telephone Co. subsidiary PLDT Communications and Energy Ventures Inc. (PCEV), formerly known as Pilipino Telephone Corp.

“As a result of the transaction, each of MPIC and PCEV’s investment in Beacon preferred shares will amount to P11.57 billion,” MPIC told the Philippine Stock Exchange.

The transaction thus “rebalances” the indirect stakes in Meralco of MPIC and PCEV, which are both controlled by businessman Manuel V. Pangilinan-led First Pacific Co. Ltd. By increasing its stake in Beacon, MPIC is expected to capture a bigger share of Meralco’s profits.

Beacon was created as a joint venture between MPIC and PCEV to hold the shares in Meralco mostly bought from the Lopez family, allowing the Pangilinan group to consolidate its investments in a sector believed to have a significant growth potential.

MPIC shares closed at P4.22 per share on Thursday, up by 3.18 percent, for a market capitalization of P100.6 billion. PCEV shares have been delisted from the local stock exchange.

Beacon owns at least 48.02 percent of Meralco but since Beacon and the Lopez group vote as a bloc in Meralco, Pangilinan’s group effectively controls at least 51.92 percent of the voting rights in Meralco even if corporate rival San Miguel Corp. and its allies still own a bloc of at least 34 percent.

MPIC grew its first-quarter net profit by 91 percent year on year to P1.57 billion as earnings contribution from its power and water distribution businesses jacked up revenues. Excluding one-off items, three-month core net profit went up by 40 percent to P1.59 billion.  Meralco contributed P534 million, or 28 percent, of MPIC’s core net income in the first quarter.