PLDT buys 20% of Meralco from Lopez group

Philippine Long Distance Telephone Company (PLDT) has bought 20% in Manila Electric Company (Meralco) from the Lopez group, which increases its stake to 30% and effectively prevents San Miguel from taking control of the power distributor.

According to an announcement, PLDT will pay 90 pesos per share for 223 million existing shares, resulting in a total consideration of Ps20.07 billion ($416 million). The Ps90 price represents a 2.2% discount to Friday's close of Ps92. Part of the deal will be settled through exchangeable notes with a face value of Ps2 billion, which gives PLDT the right to acquire 22.22 million Meralco shares.

The Lopez family has been searching for a white knight that could come in and help it retain control of Meralco ever since the Philippine government sold 27% to the San Miguel group in October and its remaining 10% to an associated company of the same group a couple of months later. This meant the San Miguel group controlled 37% of the power distributor, compared with the 34% owned by the Lopez family through its group holding company First Philippine Holdings.