Ashmore-San Miguel talks over Petron stake finalised by December

15-Nov-2008 Intellasia | Abs-cbnnews | 8:01 AM

As negotiations between Filipino food and drinks conglomerate San Miguel corporation (SMC) and London-based investment firm Ashmore Group proceed, SMC could end up controlling majority of the country’s largest oil refiner by December.

Ashmore has up to December to excercise its right to purchase a government corporation’s 40% stake in Petron. Ashmore could then turn around and partner with SMC to run Petron’s operations.

Eric Recto, Ashmore’s representative to the Philippines and newly elected president of Petron Corp., said he is optimistic that a partnership with SMC will provide a synergy that Ashmore needs.

Recto said that the investment firm prefers to partner with SMC to run Petron since the local conglomerate has more local experience.

“Ashmore is the kind of investor that will allow value to be brought into investments by the right partners. If they do conclude at a transaction, it’s logical that…SMC will bring a lot of value in Petron. There will be many opportunities to work on together,” he said.

Recto said he is not privy to the negotiations between Ashmore and SMC but confirmed that meetings are still ongoing.

Ashmore already owns 50.57% of the oil refiner and is eyeing the P25.68 billion-worth stake of state-owned agency, Phililippine National Oil Company, in Petron, resulting in an almost full ownership.

SMC earlier expressed plans to bid for the same government stake in Petron, but has since decided to negotiate with Ashmore instead.

“As soon as the terms are finalised, Ashmore will inform the government of its plans. There has been no change of intention to exercise this right,” said Recto.

SMC president Ramon Ang has described Petron “as a very good company,” which would make a worthy addition to the cash-rich conglomerate’s portfolio.