UPDATE 1-Lopez clan may sell 6.7 pct stake in Manila Electric

* Lopez clan hopes to sell 6.7 pct Meralco stake next mth

MANILA, Oct 26 (Reuters) - The Lopez business clan may sell half its remaining stake in Manila Electric Co (MER.PS) to the PLDT group (TEL.PS), the Philippine family's patriarch said on Monday, bolstering PLDT's hold on the power retailer.

The Lopez family, which has been running the power retailer for decades, holds a 13.4 percent stake worth nearly $390 million in Manila Electric or Meralco. [ID:nSP460125]

Two of the Philippines' biggest companies -- the PLDT group and San Miguel Corp (SMC.PS) (SMCB.PS) -- are currently battling for control of Meralco and the sale of the Lopez family interest is key to resolving the impasse.

"We hope next month," Oscar Lopez, chairman of the family's power holding firm First Philippine Holdings Corp (FPH.PS), told reporters when asked when the sale of half its stake would be.

Lopez added the family would hold on to a 6.7 percent interest in Meralco to wait for better prices and possibly sell out in two to three years.
Manila Electric owns the country's largest power franchise and has become attractive target after regulators allowed it to raise power tariffs by up to 27 percent, its first hike since 2003. Meralco itself has forecast a near fourfold surge in its 2009 net income. [ID:nMAN445031]

On Friday, Manuel Pangilinan, chairman of the Philippine Long Distance Telephone (PLDT), told reporters the country's largest phone firm was in discussion with Lopez to buy the family's Meralco stake, adding the talks may be concluded in a few weeks. [ID:nSP460125]
The Lopez family currently votes along with the PLDT group, giving the Pangilinan bloc control of 48 percent of the utility. PLDT, owned by Hong Kong's First Pacific Holdings (0142.HK), Japan's NTT Communications and NTT DoCoMo (9437.T), also has right of first refusal on the Lopez family stake.

If it successfully buys a 6.7 percent stake from the Lopez clan, the PLDT group's direct stake in Meralco would reach more than 41 percent. The group's interest is currently held by subsidiary Pilipino Telephone Corp (PLTL.PS) and sister firm Metro Pacific Investments Corp (MPI.PS).
San Miguel has said it controls about 43 percent of Manila Electric through its own holdings and those of business allies, while about 9 percent is held by the public.


Meralco closed unchanged on Monday at 203 pesos ($4.3) but its shares have risen 19.4 percent so far this month on talks about the possible sale of the Lopez family stake. (Reporting by Rosemarie Francisco; Editing by Lincoln Feast)


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