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MANILA, Philippines--The Manuel Pangilinan-led PLDT group is counting on its so-called “tag-along” agreement with the Lopez family to defend itself from a potentially hostile entry of Henry Sy’s group into power retailer Meralco.
But according to sources, this strategy may not be as prohibitive to the Sy group as the PLDT group hopes because of the details outlined in the agreement.
“That tag-along deal [stipulates] that, if the Lopezes sell 100 million shares, the PLDT group can sell 50 million shares [to the same buyer at the same terms],” said a source familiar with the details of the agreement.
The PLDT group’s use of this tag-along provision—a version of “poison pill” tactics used to fend off hostile corporate takeovers—may jack up the purchase price of the Sy group from P44 billion to around P66 billion, the same source said.
Apart from the Sys’ “considerable” cash hoard, additional funding may also come from other investors allied with the group, the source added without elaborating.
Last Friday, Triratna Holdings Corp.—a firm controlled by Henry Sy Jr., and perceived to be allied with Pangilinan’s rival, Ramon Ang—made an offer to buy the remaining 13.4 percent of the Lopez family in Meralco at P300 a share.
Sources said this price is double the P150 a share price offered by Pangilinan for half of the Lopezes’ remaining stake in the power retailer.
In a briefing yesterday, Pangilinan revealed that the board of Metro Pacific Investments Corp. had already approved a deal to acquire an additional 6.7 percent of Meralco from the Lopez family, to add to the 14.7 percent held by MPIC and 20 percent held by PLDT subsidiary Pilipino Telephone Co.
The deal was derailed at the last-minute by the offer from the Sy group.
Pangilinan said he was surprised by the offer, but added that it was the prerogative of the suitors to make an offer and the prerogative of the Lopez family to consider the bid.
But according to Pangilinan, his group still holds two cards to defend its position in Meralco, control of which is being contested by San Miguel’s Ramon Ang for almost a year.
“We have the right of first refusal and we have this tag along agreement,” he said, explaining that the Lopezes would have to give him the opportunity to match the Sys’ P300-billion offer if they should decide to accept it.
