Metro Pacific at the center of privatization rumors
Metro Pacific Investments [MPI 3.8 1.0%] [link], the massive conglomerate owned by Indonesian billionaire Anthoni Salim through the Hong Kong-based First Pacific Company, was connected to rumors that MPI’s cheap stock price could attract the interest of a foreign strategic investor, or encourage plans to take the company private.
In response to the rumors, MPI confirmed that it has met with “many interested investors with our current portfolio given our strong and stable performance”, but that it has not entered into any “definitive agreement” with any person or company.
MPI shares are up around 14% from where they were before the rumors began to spread on Monday.
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It seems like Manny V. Pangilinan has fallen out of love with being so heavily tied to a business that is publicly-traded.
I can’t get into his head, but I feel like this truly began in the time of the tubigserye, when Duterte was threatening to rip up the franchise/concession agreements with Maynilad, an MPI portfolio company, in a blatant and clumsy bid to stoke populist political flames.
At the time, Mr. Pangilinan wrote to shareholders that the era of publicly-traded utilities could be coming to a close, perhaps due to how vulnerable these companies were to the unchecked actions of the president.
But that was a long time ago, and it should be noted that Mr. Pangilinan hasn’t seemed to take any steps (yet) in alignment with that sentiment. Maybe his reluctance to list MPI’s attractive hospitals unit could be taken as a rejection of the market, but that feels pretty speculative.
What isn’t speculative is MPI’s stock performance, which has been in a clear downward trend since the middle of 2016, when it was worth around P7.50/share.
That’s a 50% drop, and a significant under-perforance of nearly every other conglomerate over that same time span.
Going back 10 years, the picture is even worse.
If Mr. Salim and Mr. Pangilinan feel that MPI is so dramatically under-valued, perhaps it is a great time to put their money where their mouth is and buy everyone else out.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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