PAL Holdings Inc., the listed operator of Philippine Airlines, surged 15.8 percent to close at P6.97 each on Tuesday.
Stock-market traders also noted that PAL Holdings was trading at unusually higher volumes on Tuesday.
That activity, they said, was partly driven by unverified talk of a $1-billion “buy-in” into PAL Holdings, valuing the company’s shares at P8 each, or a 14.8-percent premium to its closing price on Tuesday.
A report by abs-cbnNEWS.com later in the day said diversifying conglomerate San Miguel Corp. (SMC) was in talks for a “possible investment” in PAL.
The same report said SMC officials signed a memorandum of understanding on Friday to undertake a due diligence process on PAL until January 31.
PAL Holdings President Jaime Bautista, however, said he had no knowledge of any agreement with SMC.
“I am not aware of PAL signing an agreement with SMC to conduct due diligence,” Bautista said in a text message on Tuesday; he said he is currently on vacation and would be back in Manila on Thursday.
SMC President Ramon S. Ang did not respond to a separate text message seeking his comment.
Some analysts agree that it is now easier for PAL Holdings to court new investors, given that it had resolved a contentious labor dispute. The airline had recently laid-off about 2,300 employees by outsourcing various services like in-flight catering, ground services and flight reservation operations.
“The aviation sector is quite profitable as long as there is a stable environment for fuel prices,” Joseph Roxas, president of domestic stock brokerage firm Eagle Equities Inc., said in a phone interview on Tuesday.
“Whoever takes over PAL by now would know what to do. It still has a lot of room for improvement in terms of rationalizing operations,” he said.
Scenarios involving SMC, Ang (in his personal capacity) and even corporate rival Manuel V. Pangilinan and their takeover of PAL have been the subject of various rumors and media reports this year.
Ang said in September that he was merely providing business and strategy to advice on PAL to Tan, whom he considers a close friend. Ang had also clarified that he was in direct talks with Tan in a personal capacity, and not as SMC president.
On the other hand, Pangilinan categorically denied in October that his group was looking to invest in the airline.
At the time, Pangilinan cited uncertainties in the aviation sector. He also cited possible regulatory challenges, given that the Gokongwei family, which is behind PAL’s chief rival Cebu Air Inc., was now part of owner of Pangilinan-led Philippine Long Distance Telephone Co.
PAL Holdings earlier reported a comprehensive loss of P2.17 billion for the six months of its fiscal year ending September, or down 186 percent from the same period last year.
Its revenues were roughly flat at P37.59 billion, as passenger and cargo revenues declined one percent and 9 percent, respectively. Expenses, in part due to an increase in fuel prices, rose 14 percent during the period. With Lenie Lectura
