Business tycoon Enrique Razon Jr. offered to acquire the rest of the shares of Manila Water Co Inc. as he moves to take over the embattled water utility firm from conglomerate Ayala Corp.
Manila Water said in a disclosure to the stock exchange Friday it received a letter from Razon’s Prime Metroline Infrastructure Holdings Corp. about an intention to make a mandatory tender offer on the shares of Manila Water at a price of P13 apiece.
The tender offer price is the same price when Prime Metroline bought 820 million shares in Manila Water. The initial purchase allowed Razon to acquire a 25-percent interest in the water utility for P10.7 billion.
Ayala remains the major shareholder of the company with a 38.6-percent stake after Razon’s initial acquisition.
Ayala, however, granted Razon proxy rights from Ayala unit Philwater Holdings Co., giving him a 51-percent voting interest in the water concessionaire. Ayala’s effective voting interest in Manila Water as a result will drop to 31.6 percent.
Following the disclosure on the tender offer, share price of Manila Water plunged 10.8 percent on Friday to P13.34 apiece.
Ayala Corp earlier said the partnership with the Razon Group “will result in clear synergies to achieve Manila Water’s long-term goal of providing sustainable water and wastewater services.”
Manila Water was already working together with Prime Metroline over a dam project that would supply the Metro Manila 80 million liters a day by 2021 and 500 million liters a day by 2025.
The possible change in control of Manila Water is taking place at a time when Metro Manila water concessionaires, Manila Water and Maynilad Water Services Inc. of Metro Pacific Investments Corp., are negotiating new service contracts with the government.
The two water concessionaires earned the ire of President Rodrigo Duterte after thousands of households in Metro Manila experienced water interruptions due to the decreasing water level of the La Mesa reservoir in Quezon City.
Duterte noted there were alleged onerous provision on the water service contracts.
To appease President Duterte, the two water companies earlier declared they would no longer collect or enforce the recent arbitral awards. They also expressed willingness to renegotiate the inequitable provisions of the concession agreement.
President Duterte, however, said he would pursue the filing of charges against owners of water concessionaires Manila Water and Maynilad Water on the alleged “onerous” concession contracts with the government.