Posted on 09:39 PM, January 07, 2010 [ BusinessWorld Online ]
Listed MRC Allied Industries, Inc. yesterday confirmed that the son of tobacco, banking, and airline magnate Lucio C. Tan would soon take over the firm, reversing a denial on Tuesday.
MRC Allied told the stock exchange lawyers have begun work on a memorandum of agreement allowing Lucio K. Tan, Jr.’s entry into the property firm.
On Wednesday, the listed firm said the two parties were in talks for a power project.
MRC Allied said it was hoping to finalize the contract before a shareholders’ meeting on Jan. 22. “[W]e would continuously update the Exchange on this development,” it said in a disclosure.
No other details were provided. An executive said in a TV interview that the property firm would be transformed into a power company.
Mr. Tan, Jr. will supposedly bring in power assets to the firm.
Market speculation was that MRC Allied would be used for a backdoor listing.
“Mr. Tan, Jr. has been very active in that industry and he felt that in order for him to attract the right investor, the projects would have to be part of the listed firm,” Benjamin Bitanga, a shareholder of MRC Allied, told the ABS-CBN News Channel.
Mr. Bitanga said Mr. Tan, Jr. was in talks with several foreign entities to invest in various power plant projects in the country, and was looking at four power plants in Luzon. These plants run on hydropower, bunker fuel, and alternative energy, he said.
“Depending on the valuations [that will be agreed upon, Mr. Tan, Jr.] will end up with absolute majority. We are looking at [more than] P3 billion for [Lucio Tan, Jr.’s absolute majority stake],” he said.
Shares in MRC Allied have been skyrocketing during the past four market sessions on talk that Mr. Tan, Jr. would soon enter the company.
In a span of four sessions, the stock price of the company jumped to P0.77 apiece from just P0.36 on Dec. 29, the last trading day of 2009.
“We have always been in talks with [Mr. Tan, Jr.] and we have always been looking for opportunities and possible joint ventures. The entry of [Mr. Tan, Jr.] in MRC has been discussed for several months now,” Mr. Bitanga said.
MRC Allied on Tuesday denied that Mr. Tan, Jr. was buying into the company and would change the firm’s name into LTJ Holdings.
Market players ignored the statement, sending the stock price of the company jumping.
“Please be informed that Lucio Tan, Jr. is not member of the board or a shareholder of MRC as of our records yesterday. As indicated, these are nothing more than rumors which up to now we cannot confirm,” MRC Allied said in a disclosure last Tuesday.
The firm was incorporated on Nov. 20, 1990 as Makilala Rubber Corp., for the processing and export of baled natural rubber. In 1993, investors acquired the company from Philtread Tire & Rubber Corp. It diversified into real property development.
Projects include “eco-friendly” New Cebu Township One in Naga, Cebu and the Amihan Woodlands Township in northern Leyte.
The firm’s majority owner is Menlo Capital Corp., formerly Pacific Asia Capital Corp., an investment house that began operations in 1995. -- K. J. R. Liu
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