First Pacific inks deal to hike stake in largest RP miner Philex

Hong Kong’s First Pacific Co. Ltd. yesterday closed a deal to buy another tenth of Philex Mining Corp., the country’s largest miner. First Pacific bought 9.24 percent of Philex Mining for P9.493 billion or $202 million, increasing its stake in the mining firm to 40.7 percent and making it its single largest shareholder. “The [Philippine Stock Exchange] approved the execution of a special block sale transaction of Philex shares," the bourse said in a memorandum. First Pacific, through local affiliate Two Rivers Pacific Holdings Corp., bought the shares from Philex Mining Chief Executive Walter W. Brown, Vice-Chairman Roberto V. Ongpin and Development Bank of the Philippines on Dec. 2. First Pacific said on its Web site it would pay P7.393 billion (about $157.3 million) in cash and the balance of P2.1 billion (about $44.7 million) in the form of a promissory note to be issued by Two Rivers in favor of the sellers. The P21-per-share price for 452,088,160 shares is 7.7 percent higher than Philex Mining’s closing price on Dec. 2. The purchase was more than a year after First Pacific bought a 20.06 percent stake in Philex Mining in November last year, and as a result, the Hong Kong outfit is not required to buy out minority shareholders. “We are of the opinion that no tender offer is triggered under the rules," Philex Mining told the local bourse yesterday. “There was no acquisition of 35 percent or more within any given one-year period after Nov. 28, 2008." Under the law, an investor should offer to buy out all existing shareholders if the former acquires more than 35 percent stake in a company within one year from the first time it purchased shares. Philex Mining, which obtains minerals from its Padcal copper and gold project in Benguet, targets to start the commercial operations of its Boyongan gold and copper mines in Surigao del Norte by 2014 to sustain operations for up to 20 more years. Prices of Philex Mining shares rose to P16 apiece yesterday from P15.50 last week. — N. J. C. Morales, BusinessWorld