Following a number of big-ticket acquisitions, Metro Pacific Investments Corp. and the PLDT group won’t likely make new investments next year, the two firms’ top executive said, citing the need to take care of new businesses.
“Maybe next year, it’s time to regroup, consolidate, refresh. [Perhaps we may hold off] new investments,” Manuel V. Pangilinan, chairman of Metro Pacific and Philippine Long Distance Telephone (PLDT) Co., told reporters yesterday.
“We have too much in our plate ... I do not think it’s a money issue. It is a management issue,” he added.
Mr. Pangilinan was responding to queries on whether the Metro Pacific-PLDT bloc was avoiding a costly buyout of minority shareholders in Manila Electric Co. (Meralco) after last week’s deal to buy an additional stake in the country’s largest power distributor from the Lopez family.
Mr. Pangilinan said his group would particularly focus on the North Harbor development and television network TV5.
“It’s time to regroup. There are things to fix [such as] North Harbor Center ... We have to fix Channel 5, there are many more [things to fix],” he said.
In March, Pilipino Telephone Corp., a PLDT unit, bought a 20% stake in Meralco from Lopez-led First Philippine Holdings for $414 million.
Last month, Metro Pacific completed the acquisition of a 14.7% stake in the power distributor by buying the shares of its unit New Gallant Ltd. and the PLDT Beneficial Trust Fund (total of 13%) and by acquiring shares from the open market (1.7%).
The Pangilinan group now holds a combined 34.7% stake in Meralco through Metro Pacific (14.7%) and PLDT unit Pilipino Telephone Corp. (20%). First Pacific partly owns PLDT.
Last week, Lopez-led First Philippine Holdings Corp. accepted the offer of Metro Pacific to buy an additional 6.7% in Meralco for P22.4 billion.
If Metro Pacific gets the Lopez shares, it would end up owning 41.4% of the utility.
Metro Pacific has also signed a long-term contract with the Roman Catholic Archdiocese of Manila to manage Cardinal Santos Medical Center. The company said it was still open to acquiring other hospitals.
Last month, the firm bagged the contract to operate Manila North Harbor. It is planning to spend as much as P6 billion to develop the country’s oldest sea port.
Recently, Mediaquest Holdings, Inc., a unit of the Beneficial Trust Fund of PLDT, purchased a 75% share in Cojuangco-led ABC Development Corp., the owner and operator of TV5.
The group is also in talks to acquire management of the Philippine Star newspaper. Media-quest Holdings has a minor stake in BusinessWorld.
In the same interview, Mr. Pangilinan insisted that the sale of the Lopez shares in Meralco adhered to existing rules governing tender offers.
Government Service Insurance System (GSIS) President Winston F. Garcia claims last week’s sale would circumvent the mandatory tender offer rule. GSIS said it has acquired a 4% stake after selling 27% in Meralco to San Miguel Corp. last year.
Mr. Garcia said he also has the option of filing a complaint before regulators should Metro Pacific refuse to buy out minority shareholders for P300 per share, the same price offered to the Lopezes.
He also threatened to buy shares held by the public to get one Meralco board seat.
Mr. Pangilinan said: “There are rules and regulations that govern tender offers. We follow the rules and we abide by the rules. It is within what is provided by rules. We consulted our legal counsel on these rules.”
Under existing rules, any individual -- or a group acting in concert -- who acquires a 35% stake in any company within the span of one year must bid for the shares held by the minority at the highest price paid during the past six months.
Last week’s deal with the Lopezes was not an outright purchase. Metro Pacific will first lend the Lopezes’ First Holdings P11.2 billion, effectively securing rights over new shares.
A call option on the 6.7% stake will lapse on March 31, 2010. If it takes the option, Metro Pacific must pay P22.4 billion on top of the P11.2 billion, which will remain a loan.
Mr. Garcia claimed the setup would allow Metro Pacific to do away with the tender offer requirement.
Metro Pacific shares continued to take a beating and lost another 6.66% or P0.20 to close at P2.80 apiece yesterday. Analysts said investors were worried over how the infrastructure-based holding firm would secure financing for its new acquisitions. Read more here http://beta.bworldonline.com/main/content.php?id=1171
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