Lucio Tan Calls Off Deal Signing For San Miguel To Invest In Philippine Airlines - Source
04/03/2012| 05:19am US/Eastern
A planned signing Tuesday of a deal that will allow San Miguel Corp. (SMC.PH) to invest in billionaire Lucio Tan's two carriers--Philippine Airlines Inc. and budget carrier Air Philippines Corp.--was called off, an executive from the billionaire's camp said.
"The signing didn't proceed. Mr. Tan wants more time to go over the transaction," said the executive, who spoke on condition of anonymity.
The deal was supposed to be signed in one of the hotels that Tan owns, the executive added.
San Miguel President Ramon Ang earlier Tuesday said a deal will be signed within the day in response to media queries after the Philippine Star reported the diversifying conglomerate will invest $500 million to acquire a 49% stake in Tan's PAL Holdings Inc. (PAL.PH)--a listed company which holds 84.6% of Philippine Airlines and 99% of Air Philippines.
PAL, as the airline is known, is looking for investors to help upgrade its aircraft fleet. In its third quarter ended Dec. 31, the airline posted a $33.5 million net loss, reversing from a $15.1 million net profit in the year-earlier period.
Separately on Tuesday, San Miguel told the Philippine Stock Exchange the company remains in talks with the controlling shareholders of Philippine Airlines and Air Philippines "with respect to the possible investment by the company in PAL and Air Philippines."
San Miguel, the country's largest food and beverage conglomerate, has been expanding into new businesses as diverse as mining, power generation, infrastructure development, toll road operation, and oil refining.
Shares of both PAL Holdings and San Miguel rose on the news of a possible deal, bucking the broad market's 1.1% retreat. PAL Holdings closed 1.5% higher at PHP8.30 while San Miguel rose 0.2% to PHP113.50.
-By Cris Larano, Dow Jones Newswires; 632-848-5051; firstname.lastname@example.org