Ramon Ang, not MVP, to buy Philippine Airlines (PAL)



It’s confirmed: Ramon Ang of San Miguel Corporation (SMC) is interested in acquiring a substantial interest in the country’s carrier Philippine Airlines. Ang himself confirmed this in a report by ABS-CBN News.
San Miguel Corp. is said to be in the middle of due diligence at present where they look into the financial statements and operations of PAL before making a final bid amount.
According to the news report, SMC and PAL signed an agreement on December 23 allowing the former to conduct the audit until January 31, 2012.
Not Manny Pangilinan
Just a few months ago, in September, Metro Pacific Investments Corp. (MPI) Chairman Manny Pangilinan was rumored to be the one interested in buying PAL.
The rumor emerged after telecom giant PLDT, a company under Pangilinan’s holding firm, incorporated an aviation-related firm called Pacific Global One Aviation, Inc. Although PLDT said the move was simply meant to “rationalize PLDT Group’s internal aviation requirements,” analysts say it was a prelude to PLDT buying into PAL.
Meralco bidding war
For now, it looks like the new company really was formed for PLDT’s operational efficiency and not for possible PAL acquisition. Unless, of course, Pangilinan decides to go into the airline business and start a bidding war with Ramon Ang to acquire PAL — similar to what the two did with utilities company Meralco back in 2009.
That year, Meralco shares reached a peak of P300.00 apiece, with the price rising by 275% from January to July. The rally was attributed to a battle for control between Pangilinan’s MPI and Ang’s SMC. In the end, Pangilinan won the battle, relegating SMC to the minority bloc.
The stock of PAL Holdings, parent company of Philippine Airlines, jumped 16% to close at P6.97 yesterday. At midday trading today, PAL shares are trading at P7.28, up another 4.45%.
The future of PAL
Industry pundits, however, are not that optimistic about the future of PAL as leading player in the local airline industry. In recent years, low-cost player Cebu Pacific (CEB) has managed to snatch from it a large chunk of customers. Cebu Pacific has also claimed to be the number one airline in terms of passengers flown to local destinations.
Apart from the competition, PAL is also waging a battle against its unionized employees who were laid off in October 2011 following a massive outsourcing plan meant to drive down PAL’s operating costs.
At the same time, oil prices have been volatile which is a detriment to PAL’s bottom line.
These factors have caused PAL to incur losses amounting to $300 million during the past three years. In the three-month period alone (April to June 2011), the airline posted an additional $10.6 million loss.
Whether Ramon Ang sees PAL as a good investment will be known if he makes an acquisition bid next year.
See also:

About the Author

PSEi support seen at 6,200 and 6,000 amid weaker Peso

In a not-so-surprising move, the U.S. Federal Reserve (Fed) yesterday raised interest rates by 75 basis points (bps) or 0.75% in a bid to tame rising inflation in the United States. This was the third consecutive 0.75% rate hike by the Fed, which brings the federal funds rate, the central bank’s benchmark interest rate, to ... Read more

Official SWIFT Code of BDO, BPI, Metrobank, Philippine banks

When sending cash remittances or wire transfer to a bank account in the Philippines (such as BDO, BPI, Metrobank, Landbank, DBP, etc.), you’ll surely need the SWIFT Code of the bank. Look no further because you can find all the SWIFT Codes you need in this list! Make sure you’re using the right bank code ... Read more
blank

How to Waive your Credit Card Annual Fee (BDO, BPI, Metrobank, RCBC, Citibank, UnionBank)

Without a doubt, one of the most annoying fees that credit cardholders have to pay is the annual fee. Majority of cardholders are familiar with this fee and majority of us likely pay this grudgingly year after year after year. In the case of my credit card with BPI (Bank of the Philippine Islands), I’m ... Read more
blank

Why Filipinos do not become business owners or entrepreneurs

For a majority of Filipinos, entrepreneurship does not seem to be a typical, expected path. This is not surprising, considering that in school, students are primarily taught to become employees after graduation. Students train for years to become staff workers, reporting to a supervisor, and just waiting to receive their wages or salaries every month. ... Read more
blank

My experience investing in Mutual Funds in the Philippines

I started investing in mutual funds when I was 22 years old. As an Overseas Filipino Worker (OFW) then, I was fortunate to be able to save some money at that young age because of my work abroad. One time while I was on vacation in the Philippines, I saw a large billboard in EDSA ... Read more
blank

Income Tax Tables in the Philippines (2022)

The Philippines’ new tax reform bill, known as TRAIN or Tax Reform for Acceleration and Inclusion, was signed into law on December 19, 2017 and its implementation began on January 1, 2018. What are the new income tax rates under the TRAIN law? How will TRAIN affect income taxes of individuals and corporations? How is the ... Read more
blank

PSE Stocks Performance under each Philippine President (1987-2021)

Did you know that Philippine stocks were able to achieve an astounding growth of 800% in a span of 30 years? From 1987 until 2018, the Philippine Stock Exchange index (PSEi) rose from 1,000 points to a peak of 9,000 points — generating a return of 800% over 30 years. (The PSEi is an index ... Read more
blank

SSL 2022: Salary Increases for Teachers, Nurses, Gov’t Employees

Good news to all government employees! There’s a new round of salary increases beginning January 1, 2022! Millions of employees of the Philippine government — including public school teachers, nurses and staff of government hospitals, and workers in local and national government agencies, etc. — will be getting an automatic salary adjustment this 2022 under ... Read more
blank

PSE Trading Hours in 2022: What time open, when closed?

Before you take the plunge into stock trading and investing, make sure you understand what stocks are and how the Philippine Stock Exchange (PSE) operates. Unlike other investments that are relatively safe, stock trading is risky and loss of money is a possibility. So before you deep dive into the exciting world of stock trading, ... Read more

Price Floor and Price Ceiling of PSE Stocks

Trading bands in the PSE come in two forms: Price Ceiling, or the upper price limit, and Price Floor, or the lower price limit.

Leave a Comment