(Update) Lopez patriarch denies family division over Meralco stake sale

(Update) MANILA, Philippines - The head of the Lopez family on Thursday denied speculation that the clan has been divided over the decision to sell a substantial stake in the Manila Electric Co., the crown jewel of its empire. There was no truth in the report that the family’s 20 percent divestment in Meralco was done without proper consultations, Oscar M. Lopez, chairman of First Philippine Holdings Corp., said in a statement sent to the media. The stake was sold to the Pilipino Telephone Corp., a subsidiary of telecommunications giant Philippine Long Distance Telephone Co., for P20 billion. But Lopez admitted that there were “discussions" over the decision. “It is important to point out that given the magnitude of this decision, senior family members and some key advisors had discussions over the last few months on the future of Meralco and the group," the statement said. "Given how Meralco's history has long been intertwined with our family, acceptance of this sale was not easy, most especially by my brother Manolo, who has invested more than 30 years of his life in the company," said Lopez. Manolo Lopez is the current chairman of Meralco. Next: Lopez may relinquish seat as Meralco chair Lopez may relinquish seat as Meralco chair However, with the 30-percent stake of the group of Hong Kong conglomerate First Pacific Co. Ltd., Manolo would have to relinquish his post to give way to shareholders who have a higher stake in the electricity distributor. The Lopez family currently only owns 13.4 percent in Meralco. First Pacific is the parent company of PLDT, Piltel, and Metro Pacific Investments Corp. (MPIC). Separately, MPIC is currently negotiating to acquire the ten percent Meralco stake held by the PLDT’s Beneficial Trust Fund. "However, beyond merely just being a family matter, any decision to sell a substantial stake in Meralco ultimately necessitated a proper review and approval by the First Philippine Holdings Board of Directors. The approval was secured in a special board meeting held on March 13, 2009," Lopez said. The Lopez family was forced to partially sell its Meralco stake following the entry of the conglomerate San Miguel Corp. into the power retailer. San Miguel directly holds about 27 percent in Meralco, making it the second-largest shareholder. Its purported ally Global Investment 5000 holds another 11 percent. For its part, PLDT – which would become the largest shareholder after the stake sale – remained confident that the transaction will proceed. Besides denying the existence of a dispute within the Lopez family regarding the transaction, PLDT director Rey Espinosa said that the sale “was a collective family decision." “It is our understanding that there is really no dispute within the Lopez family contrary to reports in the newspapers, and that the sale of part 20 percent of their interest to the PLDT group was a collective family decision," said Espinosa. - GMANews.TV