SCUTTLEBUTT

No dumb luck

Instead of being penalized for breaking a supply contract with Meralco that resulted in higher electricity bills, San Miguel Corp. (SMC) recently received a P2.66-billion windfall from the state-owned Land Bank of the Philippines (LandBank).

The dispute centered on a 2008 share purchase agreement (SPA) between energy unit San Miguel Global Corp. (SMGP, then known as Global 5000 Investment Inc.) and LandBank for the sale of approximately 43.23 million Manila Electric Co. (Meralco) shares valued at P4.19 billion plus P553.85 million in interest.

The agreement was part of SMC’s broader strategy to acquire a stake in Meralco during a battle for control of the utility company involving SMC and the Metro Pacific group.

LandBank later rescinded the SPA, citing concerns that the shares were involved in a separate just compensation case with the Department of Agrarian Reform adjudication board and that the sale would be “grossly disadvantageous to the government.”

SMGP sued LandBank for damages, arguing that the cancellation was unjustified and that LandBank’s refusal to honor the SPA caused it significant financial harm.

In 2008, SMGP agreed to purchase 43.23 million Meralco shares from LandBank at P90 per share, totaling P4.19 billion plus interest of P553.85 million, to be paid in installments from 2009 to 2012.

The shares were part of a larger contest for control of Meralco, with SMC acquiring shares from various sources, including the open market and institutional investors like LandBank.

Complications arose when the shares were found to be involved in a separate legal issue with a person named Josefina Lubrica, prompting LandBank to halt the transfer.

Additionally, a graft investigation by the Office of the Ombudsman against LandBank officials delayed the deal.

SMGP was then informed on 20 May 2025 that counsel received on 19 May 2025 a resolution promulgated on 5 March 2025 that the motion for reconsideration was denied, and that the Supreme Court had ordered an entry of judgment.

Thus, the decision of RTC Branch 212 of Mandaluyong City, dated 18 March 2021, had been affirmed with finality.

To resolve the dispute between the parties, LandBank conveyed to SMGP 46,596,596 shares of Meralco.

SMGP, on 23 July 2025, crossed 43 million shares of stock of Meralco and transferred it through a special block sale at the stock exchange.

In stock trading, a “cross” or “crossed trade” occurs when a broker matches a buy order with a sell order directly, without routing the trade through the public market or the stock exchange’s order book.

This is often done for large block trades to minimize market impact, such as avoiding price fluctuations that could occur if such a large volume were traded openly.

The trade is executed at an agreed upon price, typically within the prevailing bid-ask spread, and reported to the exchange for transparency.