Meralco acquires additional 11.6% of SPNEC to gain control

Merkado Barkada

September 5, 2024 | 8:00am

Meralco [MER 402.80, down 1.3%; 65% avgVol] [link] subsidiary, Meralco PowerGen Corp. (MGen), signed a deal to acquire an additional 5.8 billion shares of SP New Energy [SPNEC 1.29, up 1.6%; 265% avgVol] from Leandro Leviste’s Solar Philippines Power Project Holdings (SPPPH) for P7.5 billion (~P1.29/share). Once completed, the transaction will give MGen a 50.5% stake in SPNEC. This will allow MGen and MER to integrate SPNEC’s financial statements. This transaction will reduce SPPPH’s stake in SPNEC to 29.4%. SPNEC’s share price is up 25% over the past month and up 17% over the past week. 
Meralco [MER 402.80, down 1.3%; 65% avgVol] [link] subsidiary, Meralco PowerGen Corp. (MGen), signed a deal to acquire an additional 5.8 billion shares of SP New Energy [SPNEC 1.29, up 1.6%; 265% avgVol] from Leandro Leviste’s Solar Philippines Power Project Holdings (SPPPH) for P7.5 billion (~P1.29/share).
 

MB bottom-line:  This is a secondary share sale, meaning that the P7.5 billion paid by MER will not go to SPNEC for it to use in the development of its massive P200 billion Terra Solar project; instead, the money will go directly to Leviste’s SPPPH. At least now we have a better idea for why SPNEC’s stock has been so hot recently, although it’s getting kind of old to see the market front-run MVP-led moves. I get that big corporate deals are hard to keep bottled up until the official announcement is made, but it seems like MVP deals leak more information than the average, especially over the past year or so. Make no mistake, this transaction is red meat for the SPNEC bulls. Now if only they could find someone other than MVP to buy some shares!     

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