GSIS increases ownership in Metro Pacific, raising stake to 12%

MANILA – The Government Service Insurance System (GSIS), the state pension fund, surprised the market on Tuesday by announcing a four-fold increase in its stake in Metro Pacific Investment Corp., led by Manuel V. Pangilinan. The stake now stands at approximately 12%, just days before the conclusion of Metro Pacific’s P55-billion privatization bid. The announcement caused Metro Pacific shares to drop 1.2% to P5.10 per share, as investors considered the implications of the company’s proposed delisting from the Philippine Stock Exchange due to its low stock market valuation. GSIS now has enough influence to block the delisting plan.

However, market analysts believe that GSIS is strengthening its position in order to negotiate better buyout terms from the bidding consortium, which includes First Pacific Group, GT Capital Holdings, Mitsui Group, and Manuel V. Pangilinan. GSIS officials did not comment on these claims. Retail investors who held Metro Pacific shares decided to sell their shares after the consortium improved its offer to P5.20 per share. The tender offer is set to close on September 7.

GSIS’s stake in Metro Pacific is worth approximately P17.8 billion, based on the tender offer price. The pension fund’s increased stake not only gives it the power to block the delisting but also strengthens its position in negotiations with the consortium. The consortium has the option to scrap the tender offer before the settlement date on September 19. GSIS’s shares are classified as public shareholdings, meaning the consortium would need to purchase them to reach the 95% ownership threshold required for delisting.

Experts suggest that GSIS is playing the long game, as it doesn’t require immediate liquidity and can use its position to secure better terms or prevent the delisting altogether. The future of Metro Pacific and its privatization bid remains uncertain.