MANILA - Despite the allegations hurled against it by state pension fund Government Service Insurance System (GSIS), Metro Pacific Investments Corp. (MPIC) maintained that it cannot be forced to make a tender offer following its acquisition of an additional stake in Manila Electric Co. (Meralco).

"MPIC has received advise from counsel that the GSIS letter does not contain any allegation or argument that would require it to revise its opinion that the transactions consisting of the term sheet dated November 5, 2009, the call option referred to in the term sheet, and the loan extended by MPIC to First Philippine Utilities Corp. dated November 20, 2009, would not trigger a mandatory tender offer obligation under Republic Act No. 8799 and its amended implementing rules and regulations," MPIC told the Philippine Stock Exchange (PSE) on Monday.

MPIC, led by businessman Manuel V. Pangilinan, was asked by the PSE to comment by 12 p.m. Tuesday on GSIS' claim that it circumvented tender offer rules, and misrepresented its "open market acquisitions" of Meralco shares.

GSIS had asked the local bourse to suspend the trading of and delist MPIC for "defrauding" the investing public.

As of writing, however, MPIC has not directly responded to allegations made by the state pension fund.

Tender offer

On November 5, the Lopez clan, through First Philippine Holdings Corp. (FPHC), agreed to grant MPIC the right to acquire 6.7% or half of their stake in Meralco in exchange for an P11.2-billion loan. This right is exercisable until March 31, 2010.

MPIC and its sister firm, Pilipino Telephone Corp. or Piltel, together control 34.7% of Meralco, with 14.7% and 20%, respectively.

An additional 6.7% stake in Meralco would increase the Pangilinan group's total holdings in the power firm to 41.7%, well above the tender offer threshold of 35%.

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

MPIC had claimed that only the 20% stake they bought from the Lopez family should be counted in determining if the 35% threshold has been breached since the other 14.7% was bought in the open market.

GSIS however branded this as "misleading and untrue," saying MPIC only bought a limited total of 1.7% of Meralco in the market.

Criminal cases

GSIS has filed 2 criminal complaints before the Pasig City Prosecutor's Office against officials of MPIC and FPHC.

GSIS said MPIC corporate information officer Melody Del Rosario made untruthful statement of facts when she disclosed to the PSE that MPIC's 14.7% stake in Meralco was acquired in the open market.

It also filed a complaint against FPHC corporate secretary Enrique Quiason for refusing to provide the pension fund with company records and documents pertaining to FPHC's call option agreement with MPIC.

FPHC has denounced the pension fund's complaint against its official, saying that it is "premature and with no legal leg to stand on."