Ashmore plans to raise stake in Philippines’ Petron to 90%
UK investment manager Ashmore Group will exercise its right to raise its stake to 90 percent in oil refiner Petron Corp, but it may turn around and sell a portion to San Miguel, Reuters quoted a top Petron official as saying Wednesday.
Talks have begun between Ashmore and Southeast Asia's largest food and beverage firm San Miguel Corp, which wants to buy into Petron, but the negotiations are far from finished, Eric Recto, Petron president and an Ashmore representative to the oil firm told Reuters.
"All it is are discussions for now," Recto said, reacting to a local newspaper report that San Miguel has struck a deal with Ashmore.
San Miguel is seeking to buy more than 50 percent of the country's largest oil refiner as it ventures out of its core businesses to fuel stronger profit growth after dominating its home market for food and drinks.
"Yes, we want to invest more than 50 percent," Ang said in a text message to Reuters when asked how much of a stake San Miguel was seeking in Petron.
On Monday, San Miguel signed a deal to buy a 27 percent stake in the country's largest power distributor Manila Electric Co in a cash deal worth 30 billion pesos ($612 million), with payments spread out over 3 years.
The deal was San Miguel's first major acquisition more than a year after it announced it would invest in heavy industry such as power, mining, utilities and infrastructure. That decision shocked many investors and was criticised by some analysts who said the company did not have the expertise in those sectors.
San Miguel had failed in attempts last year to buy the government's stake in geothermal power producer Energy Development Corp and the right to operate the country's power grid.
Ashmore, through its unit SEA Refinery Holdings BV set up by Ashmore Investment Management Limited, holds slightly over 50 percent in Petron and has the right of first refusal over a 40 percent block the government wants to sell before the year ends.
"It is our right and we intend to exercise it," Recto said.
The government earlier this month pegged the sale of its stake at 6.85 pesos per share, hoping to raise around 25.7 billion Philippine pesos ($526 million). But the stake is now valued at just 17.6 billion pesos at current market prices after recent sell offs in the stock market on fears of a sharp global downturn.
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