MVP, GMA buy-out talks reach advanced stages
Manila, Philippines - The head of dominant carrier Philippine Long Distance Telephone Co. (PLDT) said negotiations for the acquisition of a controlling stake in GMA Network Inc. have reached advanced stages, with the purchase price pegged above than the broadcasting firm’s market capitalization.
PLDT president Manuel V. Pangilinan said in an interview with reporters after the press launch yesterday of the The Outstanding Young Men (TOYM) 2012 that the telecom provider is now in advanced talks to acquire the broadcasting company.
“The purchase prices will be above GMA’s market capitalization,” Pangilinan stressed.
Data from the Philippine Stock Exchange (PSE) showed that GMA has a market capitalization of about P34 billion consisting of 3.36 billion shares.
Earlier, Pangilinan revealed that the acquisition of a controlling interest in the broadcast firm would be paid mostly in cash.
Aside from cash, the PLDT chief is also negotiating with banks and financial institutions for loans.
“It will most likely cash and loans. We’re already talking to our banks,” Pangilinan said.
He clarified that loans would only fund a small portion of the transaction.
PLDT is hoping that the transaction would be completed within the year but would still depend on negotiations with the Duavit, Jimenez, and Gozon families that control GMA.
Likewise, he added that the transaction would also have to be approved by Congress and the National Telecommunications Commission (NTC).
“The timetable is beyond our control because we have to get the approval of both the Congress and the NTC,” he explained.
PLDT’s affiliate MediaQuest Holdings, he said, would most likely acquire GMA’s common shares while PLDT would pick up Philippine Depository Receipts (PDR).
PDRs are a form of equity reserved for foreigners as the Constitution prohibits foreigners from having voting shares in media entities.
PLDT is controlled by Hong Kong’s First Pacific Co. Ltd. and Japan’s NTT DoCoMo but MediaQuest is owned by PLDT’s Beneficial Trust Fund.
Mediaquest has acquired a controlling stake in TV5 operated by Associated Broadcasting Corp.
Meanwhile, the PLDT chief said the company’s second quarter core net income would be in line with the company’s 2012 core profit guidance of about P37 billion.
“It will be broadly in line,” he added.
Furthermore, he pointed out that the company is not contemplating on raising funds this year either through debt or equity.