Government rejects Gokongwei bid

The Philippine government rejected the Gokongwei groups offer of Php24.6 billion (US$543.5 million) for the state’s 40% stake in Petron Corp. saying the price was unattractive. Finance Secretary Margarito Teves said the government believed its stake in the oil giant, the value of which could have risen sharply over the past months due to rising oil prices, was worth much more than Gokongweis offer. Teves said, however, that the government has yet to come up with an exact figure of its valuation of the asset. Energy Secretary Angelo T. Reyes said that the government was not attracted by Ashmore’s Php6.531 (US$0.14) per share offer for the stake, held by Philippine National Oil Co. (PNOC). “If we will sell, we will sell the government’s stake at a premium since we have the objective to sell the shares at a price most advantageous to the public,” said Reyes. Earlier, Saudi Aramco sold its own 40% stake in Petron to the Ashmore Group for US$550 million. The government is hard-pressed to generate more revenues than originally targeted for the year because of increasing expenditure requirements. The government originally targeted to raise Php1.24 trillion (US$27.4 billion) in revenues this year to fund more social services, such as granting electricity, health and education subsidies to poor families so they can cope with the rising prices of food. (June 17/ July 7, 2008)</P>