A Philippine business family said on Wednesday it had offered to buy the government's 40 percent stake in oil refiner Petron Corp for about $579 million. The offer from JG Summit Petrochemical Corp, controlled by the Gokongwei family, values Petron at 6.55 pesos per share, about a 17 percent premium to its closing price of 5.60 pesos on Wednesday. Ownership changes at Petron have been on the cards since March when Saudi Aramco announced it was selling its 40 percent stake to London-based investment fund Ashmore Group for $550 million. State-run Philippine National Oil Co (PNOC), which also holds 40 percent of Petron, has first right of refusal over Saudi Aramco's stake and has scheduled a board meeting on Thursday to decide its course of action. Local officials said it has the right to transfer the option to a third party. But the Gokongweis said they were interested in the government's holding, not the Aramco stake, as had been suggested earlier by Energy Secretary Angelo Reyes. “We have learned...that Philippine National Oil Company is planning to sell its entire 40 percent shareholdings in Petron Corp consisting of 3.75 billion shares,” JG Summit Petrochemical Corp president Lance Gokongwei said in a letter to PNOC dated April 21. “We are interested in making an offer to purchase the above-mentioned shares of Petron at a price of 6.55 pesos per share,” the letter said. A copy of the letter was provided to reporters by a spokesman of JG Summit, the Gokongwei-controlled conglomerate. Earlier, Reyes said the Gokongweis and Morgan Stanley had expressed interest in buying the Saudi Aramco stake. Morgan Stanley was not immediately available for comment. Investment banks, such as Morgan Stanley, have been keen to invest in physical assets over the past few years to underpin their growing involvement in the energy markets. They have continued to look for further investments in the commodities and energy markets even in the midst of the subprime crisis. Morgan Stanley, which occasionally trades physical Middle East crude, also deals with refined products and took up some clean oil storage in Singapore last year. It also signed a long-term agreement last year with INEOS, an independent refining group, to provide crude oil to, and market products from, its Grangemouth refinery in Scotland, and the Lavera refinery in France. Apart from petrochemicals, the JG Summit group owns the country's second-biggest airline Cebu Pacific. It also has interests in property and mall development, food, telecoms and banking. JG Summit Petrochemical Corp says it is the first integrated polyethylene and polypropylene plant in the Philippines. Petron's own petrochemical business is expected to take off this year. It hopes to increase gasoline production and extraction of propylene, a petrochemical used for food packaging materials and impact-resistant plastics, with the opening of a new facility at its 180,000 barrel per day refinery northwest of Manila. Petron said later on Wednesday that its net income in the first quarter fell 31 percent to 658 million pesos from a year earlier, mainly due to lower refining margins. “In spite of the drop in our income, we are confident that we will be able to meet our financial and operating targets for the year as we begin to see the positive impact of our new petrochemical feedstock units,” Petron spokeswoman Virginia Ruivivar said.
