PSE suspends Meralco’s trading of securities amid pending acquisition

THE LOCAL bourse on Monday suspended the trading of securities of Manila Electric Co. (Meralco), which earlier announced its unit Meralco PowerGen Corp.’s (MGen) intention to acquire 100% ownership of Global Business Power Corp. (GBP) as the distribution utility has yet to submit the requirements for the substantial acquisition.

In a regulatory filing, open-end investment company First Metro Philippine Equity Exchange Traded Fund, Inc. (FMETF) said that the suspension took effect on Monday morning.

“The Exchange deems that the foregoing transaction (of acquiring full ownership of GBP) is covered by the Rule on Disclosure for Substantial Acquisitions and Reverse Takeovers, under Section 5, Article VII of the Consolidated Listing and Disclosure Rules of the Exchange (the “Substantial Acquisition Rule”),” the FMETF reported.

“Pursuant to the Substantial Acquisition Rule, the trading of the Company’s shares will be suspended effective at 9:00 a.m. on Monday, December 28, 2020, pending the Company’s compliance with the comprehensive disclosure requirement set forth in the said rule,” it added.

FMETF said that the lifting of the suspension will be announced at a later date.

Based on the PSE’s disclosure rules, “if an issuer or its subsidiary has acquired more than 10% of direct interest in an unlisted company, person or group — or more than the total book value of the issuer — the trading of the securities of the issuer will be suspended.”

The Philippine Stock Exchange (PSE) said that the suspension would hold until the terms and conditions of the transaction, as well as the details on the business or project acquired are disclosed to the exchange. The latest audited financial statements of the unlisted company must also be submitted to the local bourse, if possible.

The disclosure rules, however, do not apply in cases where the issuer is merging, consolidating or acquiring an interest in its existing unit/s.

The trading of Meralco’s shares were deferred by the PSE a few days after MGen’s earlier move to fully acquire the Visayas-based GBP by buying shares from Beacon PowerGen Holdings, Inc. and JG Summit Holdings, Inc., which own 56% and 30% interest, respectively.

Beacon PowerGen, a wholly owned unit of Metro Pacific Investments Corp. (MPIC), is selling its GBP stake for P22.44 billion. Meanwhile, JG Summit is selling its stake for P12.02 billion.

Shares in Meralco on Monday climbed by 2.05 % to finish at P288.40 apiece.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., which has interest in BusinessWorld through the Philippine Star Group, which it controls. — Angelica Y. Yang