OVER MERALCO 'SHARE WAR'
CHIZ URGES STOCK EXCHANGE TO PROTECT SMALL INVESTORS

Opposition Sen. Chiz Escudero is urging the Philippine Stock Exchange (PSE) to scrutinize the ongoing "war" over shares of the Manila Electric Co. (Meralco) and ensure that the welfare of small investors is amply protected.

"The PSE should immediately look into the rise of the price of Meralco shares in light of the ongoing battle for shares between big business groups. The bourse must see to it that the rights of the investing public, especially the small investors, are amply protected," Escudero said.

Meralco shares closed higher at P221 on Thursday. It was at P203 per share last Friday, October 23.

"While a vibrant stock market helps prop up business confidence and provides the investing public with income potential, we must not lose sight of the fact that small investors must not be left unprotected in the face of corporate squabbles that can easily leave them high and dry," Escudero warned.

Last week, the group of Henry Sy, Jr. made a bid for a 13.4-percent stake in the utility owned by the Lopez family for a hefty premium at P300 per share.

On Friday, the group of Philippine Long Distance Telephone Co. (PLDT) chairman Manuel V. Pangilinan matched the Sy group's bid.

First Philippine Holdings Corp. (FPHC) of the Lopez group announced Thursday night that Metro Pacific Investments Corp. (MPIC), which is controlled by Pangilinan's group, had exercised its right of first refusal and matched the Sy group's bid price.

But FPHC said it agreed to sell only 6.7 percent of its remaining stake in Meralco, and under a loan and a one-year call option arrangement. MPIC will provide FPHC a short-term loan of P11.2 billion backed by a promissory note.

Under the new ownership structure in Meralco, the Pangilinan group will control 41.4 percent of Meralco if and when the call option is exercised while its corporate rival San Miguel Corp. reportedly controls up to 43 percent. The Lopez group still owns at least 6.7 percent while the rest is controlled by the investing public.

"Because of the intertwined interests of the major players in the Meralco stocks war, the PSE must be doubly cautious and look at related stocks as well," Escudero said.

Most shares of the active players in the Meralco shares war have risen steadily in the past days. On Thursday, PLDT shares closed higher at P2,555 while MPIC likewise ended up at P3.15 per share.

The Lopez group's listed holding firms also saw their share prices rise. FPHC shares ended higher last Thursday at P58 per share while Benpres Holdings Corp. closed higher at P4.10.