(UPDATE 2) Henry Sy son in P45-B Meralco stake bid

ABS-CBN News

Posted at Oct 30 2009 03:12 PM | Updated as of Oct 31 2009 03:46 AM

MANILA - A group headed by the son of mall tycoon Henry Sy, one of the Philippines' richest men, made a surprise offer on Friday for a 13.4% stake in Manila Electric Co. (Meralco) held by the Lopez business clan and valued at around P44.75 billion ($940 million).

Henry Sy Jr. has confirmed that together with other investors, Triratna Holdings Corp., where he sits as president, made an offer to acquire the stake.

"The plan reflects our confidence in the future prospects of the power sector in general and Meralco in particular. Our offer price represents a fair market value for such assets," noted Sy in a statement.

Sy did not say how much the offer was, but two sources of Reuters, who asked not to be named as they were not authorized to discuss the issue publicly, said it was around P300 per share or a near-60% premium over Meraclo shares' close of P188 each on Friday.

Sy's offer comes after months of wrangling between Philippine Long Distance Telephone Co. (PLDT), the country's most valuable firm, and San Miguel Corp., its best-known conglomerate, over control of Meralco, the Philippines' leading power retailer.

Sy, eldest son and namesake of the shopping center magnate, is allied with San Miguel and his entry into the Meralco ownership battle gives the food-to-power group more ammunition against PLDT.

A sale of the Lopez stake to Sy would give San Miguel control of 56.4% of Meralco, leaving PLDT with about 35% stake.

The Sy family, through holding firm SM Investments Corp., used to own an 11% stake in San Miguel, which it sold to San Miguel Retirement Fund for P27 billion in October 2007.

The Lopez group, a powerful business clan with power and media interests that has run Meralco for decades, said it would discuss Sy's proposal at a board meeting on Thursday.

PLDT Chairman Manuel Pangilinan, meanwhile, told Reuters: "We have the right of first refusal (over the Lopez stake)...and tag-along rights as well."

Under those tag-along rights, PLDT can sell its holdings under the same terms and conditions applying to the Lopez stake.

Sy's offer came just days after the Lopez family and Pangilinan separately disclosed they were in talks for PLDT to buy half the Lopez stake in Meralco.

Meralco shares have more than trebled this year amid the drawn-out battle for ownership.

The Lopez family sold a 20% chunk of Meralco to a PLDT unit in March for $414 million. - Reuters, with a report from Liza Reyes, ABS-CBN News