MANILA, Philippines - Metro Pacific Investments Corp. and its sister firm will merge their stakes in Manila Electric Co. (Meralco) as it reiterated on Monday its pledge to buy more shares in the Philippines' biggest power retailer.

Metro Pacific, a unit of Hong Kong's First Pacific Co. Ltd., said in a statement it was in discussion with Pilipino Telephone Corp. (Piltel) to consolidate their shares in Meralco.

Metro Pacific and Piltel, a unit of Philippine Long Distance Telephone Co. also partly owned by First Pacific, together own 34.7% of Meralco.

Metro Pacific has agreed to buy a further 6.6% stake in Meralco held by First Philippine Holdings Corp. via a call option that expires on Feb. 28.

Shares of Metro Pacific rebounded as much as 4.5% at mid-session from 13-month lows hit on Friday before erasing gains to close unchanged at P2.22.

The stock outperformed the main index which lost 0.3%.

Traders said the stock's fall on Friday was partly due to worries Metro Pacific was encountering cash problems, after it twice extended the signing of a call option deal on its purchase of more Meralco shares.

Metro Pacific said on Monday funding for the additional 6.6% stake has been agreed with a syndicate of banks and with parent First Pacific. It did not give further details.

Acquiring the additional shares would raise Metro Pacific-Piltel's interest in Meralco to 41.3%, the second biggest shareholder after San Miguel Corp. and its allies which jointly own about 43%.

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