JG Summit to pay P72B for Meralco shares

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Considered as the newest party involved in San Miguel Corp.’s divestment from Manila Electric Co. (Meralco), JG Summit Holdings Inc. announced on Tuesday that it will purchase the entire remaining stake of SMC in the country’s largest power distributor for P72 billion.

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JG Summit informed the Philippine Stock Exchange (PSE) that it has agreed to purchase the entire stake of SMC in Meralco, which amounts to about 27 percent of the company’s total outstanding shares, for approximately P72 billion.

“JG Summit intends to finance the acquisition with a combination of debt and equity capital,” the Gokongwei-led conglomerate further said in its disclosure to the PSE.

However, the transaction, as stated previously, is still subject to the completion certain mutually agreed conditions to closing.

Based on Monday’s closing price, JG Summit’s share is now valued at P39.75 apiece, up 2.98 percent from P38.60 each share, while Meralco shares climbed 3.15 percent to P295 each share from P286 apiece. From P74.80 each share, SMC’s price is now P75.40.

Elizabeth Abadillo, analyst in Angpin and Associates, said in a text message that the confirmation of the transaction’s price generally “created a significant impact” on Tuesday’s trade.

On Monday, SMC disclosed to the exchange that it has officially agreed to sell its remaining shares in Meralco to JG Summit, which will end up owning a 27.1-percent stake in the utility.

SMC, who will sell its stake together with those held by units San Miguel Pure Foods Co. Inc. and SMC Global Power Holdings Inc., said that it has mandated Credit Suisse as its sole financial adviser for the transaction.

SMC acquired the interest in Meralco in 2009 from Government Services Insurance System at P90 each. SMC originally held a 32-percent stake in Meralco.

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