HONG KONG - Businessman Manuel V. Pangilinan's group is ready to defend its right over the Lopez family's remaining stake in the Manila Electric Co. (Meralco) in case of sale, with funding for the more than P30 billion worth of possible acquisition to come from different sources.

When asked whether they would engage in battle in case a bidding war for the stake ensues, Pangilinan, who chairs Hong Kong-based First Pacific Co.'s units in the Philippines, answered, "we know what we're up to..absolutely."

Philippine Long Distance Telephone Co. (PLDT) and affiliate Metro Pacific Investments Corp. (MPIC), both led by Pangilinan, own stakes in Meralco.

PLDT particularly has the right of first refusal over the Lopez Group's 13.4% Meralco holdings after the two forged an alliance through the sale of 20% of the country's biggest power distributor to PLDT unit, Pilipino Telephone Corp. in February.

MPIC, on the other hand, has combined holdings of 13% in Meralco which it bought from the PLDT Beneficial Trust Fund and Crogan Ltd.

MPIC president Jose Ma. Lim said they could go to the debt market and sell shares to raise funds to acquire more Meralco shares.

"We have the ability to borrow more provided we can match it with equity," he told reporters over the weekend.

He declined to discuss details of their planned capital-raising activities, saying "we don't want to preempt anything to the market."

Pangilinan reiterated First Pacific Co.'s desire to become a significant shareholder of Meralco, with additional acquisitions now and in the future to be done solely through Metro Pacific.

But he said they are "happy" with their current stake and would increase it only at the right price.

At its previous close of P223 apiece in the market, Pangilinan said Meralco is quite expensive. "It's too high. [The pricing is speculative] by all accounts. Even analysts agree to that."

Weeks ago, diversified conglomerate San Miguel Corp. said it was eyeing to acquire the Lopez family's remaining stake in Meralco, with the financial help of a Japanese partner.

Pangilinan's group and San Miguel have been perceived to be in an ongoing battle for control of Meralco since the latter snapped up a 27% stake from the Government Service Insurance System last year.

Pangilinan said their right of first refusal over the Lopezes' stake makes them a priority in any sale.

"But as I said, this is a passive right that will only be alive once the original owners make an offer to sell."

"They are contractually bound to advise us. We can always make them an offer, but it could become a bidding thing," he said.

Benjamin Lopez, son of the Lopez clan patriarch Oscar Lopez, earlier noted that no party has approached them for a possible deal involving their Meralco stake.

"We haven't received any proposal yet. If there is a proposal, we have to present it to the board, and PLDT will be the first one to know, of course," he said.

Meralco has become an attractive target for PLDT and San Miguel as both firms can piggyback on its network of electricity poles to offer telecommunications services.

The PLDT group said it controls about 48% of the power utility, together with some business partners and the remaining stake held by the Lopezes through First Philippine Holdings.

San Miguel claims to control a total of about 43% along will allies.

abs-cbnNEWS.com is the online news department of ABS-CBN Interactive Inc., a subsidiary of ABS-CBN Broadcasting Corp. ABS-CBN and Meralco are both part of the Lopez Group of Companies.