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NEWS UPDATES 5 June 2009

Philippines’ San Miguel shuns Adaro, eyes Meralco

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Philippine conglomerate San Miguel Corp said Thursday it may offload its substantial stake in Philippines power distributor Meralco and had walked away from talks to acquire Indonesian coal miner PT Adaro Energy.

San Miguel, one of the Philippines' largest companies, made the announcement a week after it lost a boardroom battle with Philippine Long Distance Telephone Co. (PLDT) for control of Manila Electric Co., better known as Meralco.

"The (Meralco) stake is too small," Dow Jones Newswires quoted San Miguel president and chief executive Ramon Ang as telling a small group of journalists at an invitation-only briefing, referring to its 43 percent stake.

Ang also said Hong Kong's First Pacific Co., PLDT's largest shareholder, had offered to acquire San Miguel's Meralco stake by way of an asset swap that would also throw in First Pacific's interests in Philippines toll road operations and water utilities. No other details were disclosed.

Previously, San Miguel had maintained that it was invested in Meralco for the long haul, but Dow Jones quoted Ang quoted as saying it could not rule out a disinvestment if there was "a spectacular offer."

An alliance between PLDT and the Lopez family who previously were Meralco's largest shareholders took control of the utility's board at a shareholders' meeting on May 26, fending off a San Miguel challenge.

PLDT president Manuel Pangilinan stressed after the meeting that PLDT was not out to acquire more shares Meralco shares.

Meanwhile, Dow Jones also quoted Ang as saying that San Miguel, which has been venturing into heavy industry from its bread-and-butter brewing and food-processing businesses, was no longer interested in acquiring Adaro from investment bank Goldman Sachs.

San Miguel also expects to complete the acquisition of a grains terminal in the port of Mariveles, west of Manila, "probably within the month," Ang added. AFP


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