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November 28, 2008

Philippine state firms to shed stocks in Meralco
Philippine government financial institutions have agreed to sell their holdings in power retailer Manila Electric Co (Meralco) to a single buyer, Reuters quoted an official from one of the agencies as saying Thursday.

Gilda Pico, president of the Land Bank of the Philippines, said the bank, the Social Security System (SSS) state pension fund and the Development Bank of the Philippines (DBP) agreed to sell their Meralco stakes, but she did not identify the buyer.

"We will have to sign separate MOAs (memorandum of agreement) with whoever will buy (the shares), but the terms of reference would be the same," she said.

A senior official from one of the state firms told Reuters the sale could be firmed up in the coming days.

Landbank and SSS together hold around 7.7 percent of Meralco, according to the utility's end-September shareholder data. The combined stake would be worth just over 5 billion pesos ($102 million) at Tuesday's close.

DBP was not listed in Meralco's shareholder data, but the bank's stake was less than 1 percent, a newspaper said. SSS said a part of its total Meralco stake is held in investment funds managed by other institutions.

Last month, Southeast Asia's biggest food and beverage firm San Miguel Corp  bought 27 percent of Meralco in a deal worth $607 million.

San Miguel told the stock exchange on Thursday it was not in talks with SSS and Landbank to buy Meralco shares, reacting to media reports that it was the buyer. It did not mention DBP.

The senior official from one of the state firms also said San Miguel was not the buyer.

San Miguel, part-owned by Japan's Kirin Brewery Co Ltd, has repeatedly said it wants to gain majority control in any business it enters.

Its purchase of a Meralco stake last month was its first successful acquisition into heavy industry nearly two years after it declared it would venture beyond its core food and beverage business to drive future growth.

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