Why did Meralco’s share price zoom to astronomical levels these past few weeks?
In our article Turf Wars (see July 13, 2009 issue of The Philippine Star), we said that Meralco’s price action continues to defy gravity because the battle for control, given the limited free float circulating, is exerting upward pressure on the share price. We mentioned the possible scenarios: a) That the PLDT Group or the SMC group may be buying in the market to get a majority stake, b) That fund managers sympathetic to either side may be accumulating c) That a risk arbitrageur may be gobbling up the free float with the intention of selling the shares to the highest bidder d) That maybe all of them are doing the buying at the same time. Note that buying in the market is less costly than for one party to buy the other out which would trigger a tender offer for all the shares. 2) Why did it reach a staggering level of P302.50 per share? It appeared that the race to own 50-percent stake + one share was decided by “photo finish”. Therefore that last one or two percent — which matter the
