San Miguel Said to Engage 4 Banks for $3.3 Billion Meralco Sale
Citigroup Inc., Deutsche Bank AG, Standard Chartered Plc and UBS AG are helping San Miguel explore how to divest the holding, the people said, asking not to be named as the appointments are private. Options include selling a portion to another company and the remainder to large institutional investors, they said.
San Miguel said this week that unidentified parties have expressed interest in its stake in Manila Electric, or Meralco as the company is known, and proceeds from any sale will fund expansion in oil and gas. The company and units San Miguel Pure Foods Co. Inc. and SMC Global Power Holdings Corp. own about a combined 32.8 percent stake, worth 140.2 billion pesos ($3.3 billion), based on Meralco (MER)’s market value.
A stake sale to another company could mark the third-biggest acquisition in the Philippines, data compiled by Bloomberg show. An equity-market transaction such as a private placement would be the country’s biggest of its kind, the data show. Meralco shares have rallied 45 percent this year, giving it a market value of 427 billion pesos.
San Miguel President Ramon Ang and Chief Finance Officer Ferdinand Constantino didn’t reply to mobile-phone calls and text messages seeking comment on the appointments. Spokesmen for the four banks declined to comment.
Ang said this week that San Miguel, the Philippines’ biggest company by sales, may sell the Meralco stake this year. San Miguel bought the bulk of the shares at 90 pesos each -- less than a quarter of today’s closing price of 379 pesos.
Meralco is the largest distribution utility in the Philippines, serving a quarter of the country’s population in an area that accounts for half of its gross domestic product, according to its website. The company said in April that first-quarter net income rose 19 percent to 4 billion pesos.
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