Wednesday, May 7, 2008

Meralco takeover a play of words?

Executive secretary Eduardo Ermita just denied a purported palace plan to takeover Meralco. Ermita told journalists in a media forum that, though the Palace has the numbers to force a takeover, he denies that they intend to dislodge the Lopez Group from the power distribution firm. Ermita said they're just forcing Meralco to reveal and "open its books for scrutiny" so that Meralco will be forced to lower its electricity distribution rates.

This is a stark departure from the "war-like" stance of Gloria when the little dictator faced a group of businessmen a few days back. Could this be the result of what GSIS President Winston Garcia revealed during Ricky Carandang's show "News on 8" over ANC this morning?

Garcia told Ricky that he has been in contact with the Lopezes and he assured Ricky and the public that "there'll be no fireworks" come May 27.

However, if you analyze what Garcia told Ricky and what Ermita told the palace media, there seems to be a stark difference.

Garcia wants a change in the management of Meralco. While Ermita says all of these noise is just "pressure" from the palace to lower electricity rates.

Ermita knows that you can't just "shout" at the Lopezes to get their attention. No. They've been entrenched already and so callous and so haughty enough that they'll not bulge in their seats even if your voice turns hoarse. Garcia knows this. That's why he's targetting a management change, not a company takeover.

I think Garcia is telling the truth that government does not intend a corporate raid. What is certain though is government is eyeing a management change which is an under-handed tactic to effectively control the firm.

What's certain is this---government has achieved what it wants when it played the takeover card. I mean, it exposed how vulnerable the hold of the Lopezes is in Meralco. It remains to be seen though if this thing will lead to what Ermita says as a lowered electricity rate.

Probably, Meralco chairman Lopez is correct. Garcia is just shaking Meralco down to probably prop it for a ripe picking in the future, not now when the issue is still hot. Garcia is creating this fuzz to force a diminution of Meralco stock. That way, investors can still buy in and eventually dilute Lopez stocks more.

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