DEALTALK-Manila Electric sizzles, shareholder tussle not over

* More share gains likely as ownership tussle goes on

* Meralco gained 7.5 pct this mth, up about 240 pct this yr

* Rival groups to pursue shares in open market

* Competing bids designed not to trigger tender offer (For more Reuters DEALTALKS, click [DEALTALK/])

By Rosemarie Francisco

MANILA, Nov 16 (Reuters) - Manuel Pangilinan, one of the Philippines' most powerful corporate figures, looks to have gained the upper hand in the fight to own Manila Electric Co (MER.PS), ensuring the utility's shares will keep rising as the takeover tussle continues.

The closely followed battle for control over Manila Electric or Meralco, the Philippines' largest power retailer holding an extensive fibre optic network, pits Pangilinan, chairman of PLDT (TEL.PS), against Ramon Ang, president of San Miguel Corp (SMCB.PS)(SMC.PS).

Pangilinan, the chairman of Metro Pacific Investments Corp (MPI.PS), recently bought half the 13.4 percent Meralco stake held by First Philippine Holdings Corp (FPH.PS).

With the $471 million buy, Pangilinan upped his shares in the company and allowed his allies, the Lopez business clan who own First Holdings, to keep a hand in the business they have been running for decades.

Pangilinan is not ready to stop buying [ID:nMAN100864] and neither is Ang's group. Analysts say the takeover fight will spill over to the open market and persist until a shareholder group ends up with at least 50.1 percent of Meralco.

"The freefloat is less than 10 percent, I'm sure both of them are looking for whoever is holding those shares," said an analyst from a foreign equities house who asked for anonymity for lack of authority to speak to the media.

"One thing is for sure, until somebody gets to 51 percent, Meralco's share price will be high, because it will be accumulated," the analyst said.

Meralco shares, down nearly 3 percent on Monday to underperform the broader market's .PSI 0.76 percent decline, have risen nearly 240 percent so far this year and is up 7.5 percent this month.

MATCHING BID

The latest deal by Pangilinan's Metro Pacific was designed to match a rival proposal submitted days earlier by Henry Sy Jr., son and namesake of the country's richest man and business partner of San Miguel's Ang, who offered to buy the Lopez's entire 13.4 percent Meralco stake at 300 pesos ($6.4) per share. [ID:nMAN347240]

The terms of Metro Pacific's transaction with First Holdings ensures it will end up owning the Lopez family' remaining stake if and when they decide to sell out anytime in the next three years. But even if Pangilinan buys all of the Lopez clan's stake, his group would end up with only 48 percent of the utility.