MANILA - Philippine Long Distance Telephone (PLDT) is in talks with the Lopez group for the purchase of its remaining stake in Manila Electric Co (Meralco), Chairman Manuel Pangilinan said on Friday.

He told reporters he was in talks with Oscar Lopez, chairman of the Lopez family's power conglomerate First Philippine Holdings Corp (FPHC), and that discussions should be concluded in a few weeks.

The Lopez group's 13.4% stake in Manila Electric, worth about P18.2 billion ($387 million) at current prices, is key to resolving a long tussle for control of the utility between PLDT, which is Manila's most valuable company, and food-to-power group San Miguel Corp (SMC).

"We talked to Oscar Lopez for that, because they are the owners," Pangilinan said about the stake. "There are ongoing discussions."

San Miguel has said it controls about 43% of Manila Electric through its own holdings and those of business allies. (Read: SMC eyes higher stake in Meralco)

The Lopez group sold a 20% stake in Meralco to PLDT in March for $414 million and votes its remaining 13.4% holding with the telephone firm. Together they control 48% of the utility while about 9% is held by the public.

PLDT, owned by Hong Kong's First Pacific Company Ltd, Japan's NTT Communications and NTT DoCoMo, has right of first refusal on the Lopez family stake. 

Meralco owns the country's largest power franchise and has become attractive target after regulators allowed it to raise power tariffs by up to 27%, its first hike since 2003.

Meralco itself has forecast a near fourfold surge in its 2009 net income.

PLDT and San Miguel are also eyeing Meralco's fibre optic network to boost their own telecommunications ventures.

Oscar Lopez told Reuters earlier this month his family was open to selling its stake in Meralco at the right price.

"We see ourselves selling Meralco shares only if the share price is attractive or when we require funding to address our other investments and/or service our own debt obligations," he said in an e-mailed response to Reuters' questions.

Lopez also told Reuters the group plans to subscribe to its geothermal unit First Gen Corp's planned rights offer before the year ends, as it pursues more investments in renewable energy.

Analysts have said they expect the Lopez family, which has run Meralco for decades, to sell out of the power distributor to fund its purchase of more shares in First Gen and to concentrate on power generation, where it has poured huge investment in recent years.

Meralco shares closed flat at P203 on Friday as the overall market rose 1.53%, but it has been one of the strongest performing, and volatile, issues on the stock market this year. It had soared to a high of P302.5 in July before sliding to P166 earlier this month and then rebounding.

At Friday's close, it is up about 240% on the year.