MANILA - The local bourse has referred to the corporate regulator the tender offer issue raised by state pension fund Government Service Insurance System (GSIS) on the Meralco shares deal of Pangilinan-led Metro Pacific Investments Corp. (MPIC). 

In a statement released Tuesday, the Philippine Stock Exchange (PSE) said the issue is now for the Securities and Exchange Commission (SEC) to resolve. 

"The PSE will refer the tender offer issue to SEC as we do not have the jurisdiction to enforce the Securities Regulation Code (SRC) tender offer provision and its implementing rules and regulations. That power belongs to the SEC," PSE President Francis Lim said.

Lim said this is not the first time that the PSE referred a share acquisition issue to the SEC, citing cases of cement manufacturer Holcim Philippines Inc. and San Miguel Corp.'s purchase of shares in Petron Corp.

The PSE earlier requested for SEC's take on the application of the tender offer rule in SMC's option to acquire 50.1% of Petron and separately, the purchase of Cemco Holdings Inc. of Holcim Philippines.

Tender offer

The Lopez clan, through First Philippine Holdings Corp. (FPHC), agreed to grant MPIC the right to acquire 6.7% or half of their remaining stake in Meralco in exchange for an P11.2-billion loan. The 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.

As a result, GSIS filed 2 criminal complaints before the Pasig City Prosecutor's Office against officials of MPIC and FPHC, and asked the PSE to suspend the trading of and delist MPIC for "defrauding" the investing public.

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 part of the Lopez Group of Companies.