MANILA - Pangilinan-led Metro Pacific Investments Corp. yesterday insisted that it cannot be forced to make a tender offer for its shares in Manila Electric Co. (Meralco).

This comes despite complaints from the Government Service Insurance System (GSIS) that the company should have offered to buy the shares of the other existing Meralco shareholders when it recently bought an additional stake in the electricity distribution firm.

The company said in a statement that under the rules of Securities Regulations Code (SRC), the shares that Metro Pacific holds in Meralco are not subject to a tender offer.

“In any event, a mandatory tender offer under Rule 19 of the [implementing rules and regulations of the code] will be triggered by the acquisition of 35% or more equity in Meralco by Metro Pacific/Pilipino Telephone Co. (Piltel) group within a 12-month period the SRC rule exempts open market purchases from the tender offer obligation,” the statement read.

Piltel currently holds 20% of the shares of Meralco, which were acquired from the Lopez group. The shares that are currently being held by Metro Pacific were bought in the open market.

“While the group holds a combined 34.7% of Meralco common shares, only the acquisition by Piltel of 20% common shares from the Lopez group would be counted in determining if the 35% threshold has been breached,” the statement added.

Under the tender offer rule, any individual or group who acquires a 35% stake in a listed company within the span of a year must offer to buy out other shareholders at the same price agreed upon with the block seller.

GSIS President and General Manager Winston F. Garcia accused Metro Pacific and the Lopez family of circumventing the mandatory tender offer rule with the deal to buy an additional 6.7% in Meralco.

Mr. Garcia also threatened to file a complaint against Metro Pacific and the Lopez-led First Philippine Holdings Corp. for large-scale estafa.

He scored Metro Pacific for the P11.2-billion loan it has offered to the Lopez group for the outstanding Meralco shares, stating that the loan extension triggers the mandatory tender offer.

Manuel V. Pangilinan, chairman of Metro Pacific, said the company has sought the advice of lawyers regarding its acquisition of Meralco and have been assured that a tender offer would not be necessary.

“In response to the statement of GSIS, Metro Pacific has obtained advice from counsel which sets out the opinion that the extension of a loan to First Holdings and the grant of a call option on the shares, or the exercise of the call option by Metro Pacific would not, in each case, trigger a tender offer,” Metro Pacific said.

It added that “the grant of the loan does not constitute payment of the purchase price of the shares and the loan is interest bearing and secured by a pledge over securities other than the subject shares.”

The 6.7% additional shares in Meralco of the Lopez group were originally offered for sale to Henry Sy, Jr. but the sale was dropped last week.

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