San Miguel Corp. (SMC) is not gearing up for a boardroom battle at the country's largest power distributor, the Manila Electric Co. (Meralco), the diversified conglomerate's top official stressed Thursday.

SMC vice chairman and president Ramon Ang squelched rumors that the conglomerate is racing with the reported tandem of businessman Manuel V. Pangilinan and the Lopez family in acquiring Meralco shares in a bid to seize control of the power firm.

Ang, who is also Meralco's vice chairman, maintained that SMC has not bought additional Meralco shares from the open market since purchasing the 27 percent stake previously held by state pension fund Government Service Insurance System (GSIS).

"SMC officially has not bought any shares. We are happy and satisfied with our investments in Meralco," he told reporters.

Ang stressed that SMC also has no plans to solicit proxies in time for Meralco's annual stockholders meeting in May, dousing persistent news of an imminent board war with the Lopez group who has been the power distributor's decade-long major owner

"We never work that way. We never have to go with that kind of working relationship with anybody. Our support is with Meralco and its management," he said.

Since last week, talk has been rife among market players and observers about moves by Pangilinan, through Hong Kong-based First Pacific Holdings Inc., to snap billions of pesos worth of Meralco shares to foil an alleged takeover by SMC.

Reports quoting unknown sources noted the Lopez family was in a deal with Pangilinan, who was said to have already gobbled up 6 percent of Meralco, signaling a looming boardroom tussle at the power utility.

Several block sales involving Meralco shares were made at the Philippine Stock Exchange in the past days but there was really no way to determine who was buying the shares because the deals were brokered by trading participants who are not allowed to disclose the identity of their clients.

The rumored stake purchase by Pangilinan lit a fire under Meralco shares, sending them up P20 to a record close of P112 a piece on Thursday. The stock has gained more than 24 percent this week and about 88 percent so far in 2009.

Manny, a good man

Ang could not say, however, if Pangilinan was investing in Meralco.

"I'm not sure about it because the Lopez family is saying they are not selling. There was a rumor that Meralco Retirement Fund sold him some shares but I'm not sure," he noted.

But if Pangilinan's group was indeed gaining foothold in the power utility, Ang said SMC would gladly welcome the move.

"We can work with anybody. Manny is a good man," he said.

In an earlier interview, Pangilinan--who heads First Pacific's cash cow, Philippine Long Distance Telephone Co. (PLDT)--neither confirmed nor denied that they were accumulating shares in Meralco.

Pangilinan merely commented, "Whenever we invest in a company, our main objective is to raise shareholder value and we would like to work with the existing board and with existing management."

Nevertheless, Pangilinan claimed an existing "relationship" with the power firm. "There are things we relate with Meralco now. Our wires are on their posts. Objectively speaking, there are synergies and they have a significant fiber optic in Metro Manila."

Boardroom battle

Some analysts still reckoned that a boardroom battle was looming.

"Pangilinan always wanted to get into Meralco and it looks like he has an agreement with the Lopezes," said one analyst at a local broker, who could not be named due to company policy.

Ang previously told reporters that he was toying with the idea of using Meralco power lines as the same delivery infrastructure for SMC's broadband business under Liberty Telecom Holdings Inc., whose additional income could offset expenses related to Meralco.

A source said SMC's takeover of Meralco threatens Pangilinan since PLDT's lines also ride on Meralco's network infrastructure.

The same source said that Pangilinan has decided to team up with the Lopezes because SMC was also investing in Express Telecommunications Co. Inc. (Extelcom), which plans to directly compete with PLDT's Smart Communications and the Ayala Group's Globe Telecom. The Lopez family owns another telephone company, Bayan Telecommunications.

Ang has just confirmed they are already in the final stage of acquiring Extelcom. "We don’t know yet how much but we're in the final stage of negotiation," he said.

The Lopez family owns about 34 percent of Meralco. And with First Pacific's 6 percent stake, the two can now compete with SMCl's direct stake in the power firm. With a report from Reuters