According to deal insiders, talks between the leadership of the Maharlika Fund and National Grid Corporation of the Philippines are just about complete, with a purchase price set to be agreed in principle.
Of course, talks have been ongoing for over a year now but little progress was made, initially, because of the wide gap between what the Maharlika Fund was willing to pay (a “lowball” price, so to speak) and what the private owners of NGCP were asking for (possibly an ambitious price itself).
That’s because Maharlika — which wants to buy a 10-percent stake in NGCP on behalf of the government — had originally pegged its offer on the prevailing stock market price of Synergy Grid & Development Philippines, the publicly listed holding firm that owns the Filipino side of the power grid operator.
The problem with this is that Synergy’s price hasn’t quite reflected the firm’s full value, to some degree because the stock has been relatively lightly traded since its 2021 “re-IPO”.
On the other hand, NGCP’s Filipino owners had based their asking price on the firm’s book value which is, obviously, higher than Synergy’s price on the Philippine Stock Exchange — much higher, in fact.
Well, we heard that Maharlika has since upped its offer substantially, now coming close to the asking price of NGCP’s owners. This new offer price is now much better that NGCP’s owners are now said to be amenable to saying “yes” despite the fact that small pricing gap that still exists.
So… is this why Synergy’s share price on the bourse has spiked in recent days? If so, how high might it go? Your guess is as good as ours.
Senior Reporter