Razon’s Prime Metroline Holdings Inc. will conduct a tender offer for Manila Water shares at 13 pesos each, according to a stock exchange filing. Shares of the water company fell as much as 9% after the announcement.
The tycoon’s offer was disclosed a day after Ayala Corp. said unit Philwater Holdings Co. will grant proxy rights to Razon, giving him a 51% voting interest in the water concessionaire after the transaction. Ayala’s effective voting interest in Manila Water will drop to 31.6%, it said.
Manila Water shares were down 7.8% as of 10:14 a.m. local time on Friday, poised for its biggest decline since Dec. 17 when it plunged by 36%. The benchmark Philippine stock index dropped 0.8%.
Manila Water’s ownership change is happening before the Philippine capital’s two water providers, the other being Metro Pacific Investments Corp.’s Maynilad Water Services Inc., start contract talks with government following attacks by President Rodrigo Duterte. On Feb. 3, Razon acquired a 25% stake in Manila Water.
The water companies have been in Duterte’s line of fire since December for allegedly profiting from unfair provisions in their contracts, which were slated to run until 2037. Duterte told the concessionaires: accept government’s offer for new water contracts or see the state take over their operations.