ENERGY conglomerate First Philippine Holdings Corp.  rose to its highest level this year as investors felt assured of deal between the group of Manuel V. Pangilinan and the Lopez family for the latter’s stake in power distributor Manila Electric Co.

First Philippine owns the remaining 13.4-percent Lopez stake in Meralco—said to be worth between P20 billion to P30 billion.

The share price of First Philippine Holdings rose another 4.3 percent to P48.5 on Tuesday’s session after its chairman Oscar Lopez said a deal to sell half of the Meralco stake to Pangilinan may be concluded next month.

Meanwhile, an analyst said the stock still has room to rise given that it is currently “undervalued.”

In a phone interview, CitisecOnline assistant vice president and head of research April Lee-Tan said even at Meralco’s estimated fair value of P130 per share,  which is significantly less than its current price, the move to sell part of the Meralco stake will benefit First Philippine shareholders.

“I think First Philippine would be a better play on this development,” she said.

“Before it had one investment and [after] it will become cash,” she said noting the energy company may use this to pay off its debts, thereby “unlocking” its value.

Much will also depend on how much the group of Pangilinan will pay for the shares as details of the deal have yet to emerge.

She said an offer above Meralco’s fair value will benefit the share price of First Philippine Holdings.

Pangilinan owns 34.7 percent of Meralco through Philippine Long Distance Telephone Co. and Metro Pacific Investments Corp.

Meralco’s share price fell 4.43 percent yesterday to P194 apiece as investors locked in profits. Tan said the statements made by Lopez and earlier by Pangilinan, became a signal for some to sell.