MANILA - The volatile price of Meralco shares in the stock market has cost infrastructure firm Metro Pacific Investments Corp. (MPIC) an additional P7.88 billion more as it booked the Meralco shares it previously acquired from Beneficial Trust Fund and Crogan Limited for P18.18 billion.
When the Beneficial Trust Fund (BTF) acquired the Meralco shares in March, it only invested a P10.3 billion for the purchase of an equivalent to 10.17% stake in the power retailer.
In March, BTF's acquired Meralco shares from the open market at price ranging from P62 to P123.90.
In a disclosure to the stock exchange on Monday, MPIC said it valued the Meralco shares of BTF and Crogan Ltd for P126 per share.
MPIC said this valuation was based on the average price of Meralco in the stock market for the past 60 days.
MPIC said in the disclosure that it will be acquiring 113.313 million Meralco shares from BTF (worth P14.27 billion) and 31.072 million shares from Crogan (worth P3.91 billion). Payment will be in the form of cash.
Meralco's share price ended higher on Monday at P180 per share from last Thursday's close of P175 a piece.
MPIC had been delaying the internal transfer of the Meralco shares from BTF's books to MPIC's due to the spikes and turns in the market value of Meralco.
Meralco's share price has swung from less than P100 at end-2008 to almost P200 as market players expected Meralco's two major shareholders--San Miguel on one hand and the alliance of MPIC, its sister company PLDT, and the Lopez family on the other--to outbuy each other.
BTF, the retirement fund for qualified PLDT employees, acquired 10.17% of Meralco, while Piltel, a unit of PLDT, acquired an estimated 20% block.
MPIC said in the disclosure that its acquisition of Meralco shares is in line with company's status as one of the country's leading infrastructure companies and will complement the company's existing investment in the North Luzon expressway, Maynilad, and various hospitals nationwide.
"The possible operational synergies in terms of Meralco's subscriber base, accessible data centers, wireless bill payments and transportation fleet is expected to enhance the customer response and speed up the coordination system within the MPIC group," Metro Pacific said.
Metro Pacific also said it will continue to assess suitable opportunities to develop and maintain its position as a strategic shareholder in Meralco.
"MPIC further intends should suitable opportunities arise, to continue to acquire further shares in Meralco as to develop its position as a strategic shareholder with appropriate board and management participation," it added.
Funding for the acquisition of Meralco shares will come from subscription of MPIC shares by BTF and Metro Pacific Holdings Inc., which is owned by First Pacific.
With the share issuance, MPIC will have a 14.51% stake in BTF while Metro Pacific Holdings will decrease its stake in MPIC 93.15 to 80.2%.
"The issuance is expected to strengthen Metro Pacific's capital base," Metro Pacific said
MPIC's outstanding shares will increase to 18.6111 billion shares worth P15.211 billion with a total capitalization of P34.6 billion.
Depending to market conditions, the board of Metro Pacific also approved a plan to conduct follow on offering within the next 48 months.
Under the plan, Metro Pacific will offer at least 15% of outstanding capital to investors that will raise as much as $100 million in proceeds.
Aside from acquiring Meralco shares, Metro Pacific is also interested in getting at least 30 percent stake in Citra Metro Manila Tollways Corp., (CMMTC) the operator of Skyway project in the south of Metro Manila.