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Pangilinan, GMA 7 talks collapse over price, down payment

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Manuel V. Pangilinan and GMA 7 chairman Felipe Gozon

An almost “done” deal for a controlling stake in “Kapuso” network GMA 7 by the group of businessman Manuel V. Pangilinan has collapsed over regulatory “risk-sharing” issues.

The Philippine Long Distance Telephone Co. (PLDT) group disclosed to the Philippine Stock Exchange yesterday that MediaQuest Holdings Inc., an investee company of PLDT Retirement Fund, had terminated recent discussions with GMA Network’s major shareholders.

Industry sources said the termination of talks had nothing to do with Pangilinan’s recent threat to move back to Hong Kong, noting that discussions had fizzled out even before that.

Knowing that the deal could encounter rough sailing among regulators, Pangilinan’s group was not willing to shell out the “advance” amount that would have guaranteed a windfall to the sellers at the buyer’s expense.

“The parties have been unable to arrive at mutually acceptable terms despite the continual discussions and efforts exerted in good faith,” PLDT said.

A separate disclosure from GMA 7 contained the same message.

Price, other issues

Pangilinan, who chairs PLDT, said in a statement that the termination of the initiative to acquire GMA 7 was not expected to adversely affect the PLDT group’s “strategy of evolving from a traditional telecommunications company into a multimedia service company.”

“The PLDT Group continues to believe that owning, producing and providing content across multiple platforms is an important component of its blueprint for growth and as such, intends to pursue its media strategy by building on MediaQuest’s current investments in TV5, the country’s third largest free-to-air television network by audience share, and Cignal TV, the leading provider of direct-to-home satellite television services,” he said.

GMA 7 chairman Felipe Gozon said that aside from the price, “there were other issues, commercial and legal, that we (GMA 7 and TV5) did not agree on. In good faith, we tried to resolve these issues, but we couldn’t. So, we decided to terminate the discussions.”

Gozon said GMA 7 remained “amicable and friendly” with the Pangilinan-led TV5. He said he could not divulge specific issues due to a confidentiality agreement.

Inquirer’s Biz Buzz reported in early September that after moving close to an acceptable pricing of P52.5 billion (enterprise value for 100 percent of GMA 7), the parties were stalled by the amount of advance payment that the would-be sellers had wanted Pangilinan’s group to lay on the table ahead of a congressional approval to consummate the deal.

“In the Gokongwei deal, both parties were willing to share the risk,” one source said.

The source was referring to PLDT’s acquisition of Digital Telecommunications from the Gokongwei group, which attracted concerns over “monopoly” because it resulted in a combined telecom market share of 70 percent.

After some delay, the deal was approved by regulators on the condition that PLDT would give up the 3G frequency of its unit Connectivity Unlimited Resource Enterprises.

GMA 7 shares tumble

Shares of PLDT gained 0.44 percent while those of GMA 7 tumbled 8.3 percent at the stock market on Thursday after it was announced that the talks had collapsed.

“If I were MVP, why will I put a big downpayment when it needs congressional approval?” said Wilson Sy, a director at Philequity Management Inc.

Alfred Dy, CLSA Philippines head of research, said walking away from the deal would “allow Pangilinan to focus on core businesses of PLDT and other growth opportunities.”

Dy said the acquisition would not have been cheap for Pangilinan’s First Pacific group, which he noted was also into other businesses like infrastructure and healthcare.

Other analysts said Pangilinan may not have been willing to shoulder all the regulatory risks in this initiative, especially when his hands were full with the mining pond tailing leakage at Philex Mining Corp.’s Padcal site in Benguet. Pangilinan also controls Philex, the country’s biggest gold producer. With a report from Bayani San Diego


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Tags: Business , GMA-7 , Manuel Pangilinan , television


  • http://ourleftfoot.blogspot.com/ Tristanism

    Potek naman. Ambag ambag na nga lang tayo at bilhin na natin to. Antagal na nito a.

  • akimaxx

    Hindi ko maintindehan, bakit gustong-gusto bilhin ni Manny Pangilinan ang GMA7. Mayroon na siyang TV5, ano pa? Sa mundo ng negosyo, mahalaga ang kompetisyon, hindi monopolohiya. Ang GMA ay malaki na ang pinagdaanan at karanasan sa mahabang panahon, hindi ito nabuo sa isang araw lamang. Hindi maliwanag ang kanilang di pinagkasunduan, na hindi ako interesado dahil usapang negosyo yan. 

    Maganda na ang tinatahak ng GMA7, dahil ayos ang mga balita (balanse), mga dokyumentaryo na di magawa ng ibang istasyon, nasa kanila. Ang dapat na lang ayusin ay ang mga telenobela. Lumayo na sa istoryang komiks at maging transisyon upang maturuan ang manunood ng mas  makabuluhang tema. Sundan natin ang yapak ng nga Koreano, pero huwag manggaya.

    Eto pa ang isa kong obserbasyon, hindi kailangang maging maganda o pogi ang host, ang mas mahalaga ay matalino at mukha silang ordinaryong Pilipino. At ang pinakamahalaga, ang puso.

    • FernandoBusi

      PHP52 billion may not be enough to push ABC5 near the spot of GMA 7 and ABS CBN given the cost of talents these days. Also a crowded top would just make advertising rates lower so less revenue for the expense. If at 52Billion he can control both stations however the monopolistic advantage of his position will command a lot of influence in Philippine society and can be used as leverage to promote his other business interest. It would have been brilliant. 

  • http://pulse.yahoo.com/_7T2BPPGLG457K5BUPQBPOKDPA4 Marlon

    MVP is allegedly a DUMMY of the Salim Group of Indonesia.

    MVP is not the owner of First Pacific Group which owns PLDT, MERALCO, NLEX, TV5, PHILEX etc. He is merely the CEO.

    The real owners are the Salim family of Indonesia who are accused of laundering the billions of dollars that the late dictator Suharto allegedly stole from the Indonesian people. This money is what they use in their business empire across Asia which includes First Pacific which MVP merely manages but does not own.

    MVP does not make a move without the imprimatur of the Salim Group. In effect, the RP economy is being controlled by Indonesians through a Filipino DUMMY.

    By getting GMA, MVP can give good media exposure to his other businesses especially PHILEX mining which is getting bad press from anti-mining ABS-CBN.

    This GMA deal should not push through because it would mean that Indonesians will control Philippine media.

    • indiosbravos2002

      I agree. MVP is a manager not a capitalist. He might act as if he owns the companies but bottomline he is just another employee.

  • main_man40

    if the MVP talks collapsed, then GMA should start talking to SMC. . . i read it somewhere that SMC is also interested in them, too. . . . at least, filipino company. . . . 

  • Keith_P

    Yawn. This isn’t exciting at all one way or the other. Kahit naman nabili ni MVP ang GMA wala pa rin namang magbabago. Nakakabobong basura pa rin naman ang mapapanood sa big three local stations.

    Kung nabili ba ni MVP yang GMA magkakaroon na tayo ng primera klaseng sitcoms tulad ng Modern Family, Arrested Devlopment at Friends? Dramas tulad ng X-Files at Mad Men? Sci-fi shows tulad ng Star Trek at Doctor Who? Educational at scientific programs tulad ng Mythbusters at Seconds From Disaster?

    Asa pa!

    • FernandoBusi

      Asa pa the annual budget of a good sci-fi like “Enterprise” is now $50 million.

  • http://pulse.yahoo.com/_44JMK2UGPXICPBKLDGLKPXLXWQ Loy

    I don’t think MVP is the real buyer of GMA. If MVP is just the point man here of Salim, he would ask: WHY BUY ANOTHER STATION IN YOUR COUNTRY WHEN YOU ALREADY HAVE YOUR CH. 5? WHY NOT USE THAT MONEY TO IMPROVE IT?  I guess, it is a bigger political game.  When Senyor Simyon is back at Times Street after four years, the new incumbent may start asking how come a government asset was given back to the former owner? It pays to have a fallback.  Or the new aspirant may need a network which will have to compete with the network that will back up a Simyon bet.  Anyway, spending even USD3Billion for a network may just be a cost of doing business.  Access to Pagcor funds can easily pay that off.

  • FernandoBusi

    I don’t know why there are so many anti MVP’s here. Sure he does not own first pacific and its majority owned by Salim Group it doesn’t mean he doesn’t have a brain. Most Filipino employees are used to the idea of sweldo but when you get to be at the top its not just sweldo. You think for what may be best for the company because you also have options tied in to your compensation. Also MVP is a great manager otherwise Anthony Salim would have replaced him, don’t forget there were some whites in First Pacific before who were after MVP but in the ensuing power struggle he won. 

    • wilfel

      You must be under MVP payroll or gains something from the company manage by him. Replying to every criticism MVP gets on this column. But all those comments are right since MVP is not the owner of First Pacific but just a CEO.

      • FernandoBusi

        Actually if business plans proceed I will be on the other side of the fence. But i do admire the man having worked his way up from just another manager at the old Bancorp to what he is now. Saying MVP is just a CEO is like calling Ramon Ang as another CEO the fact that he has remained at his post is impressive CEO’s who don’t perform are kicked out of office.

  • http://pinoy-politics.blogspot.com Monsi Serrano

    A lot of people don’t know that MVP’s wealth comes from the Genting Group. If he controls the Number 1 media in the country (which he said in his speech that he wants to acquire the number 1 as told by my friend from TV5), then in my humble opinion, it’s dangerous. Elvira de Lara-Tuprio, you are right. It’ll be a monopoly. When the acquisition pushed thru, there’ll be inevitable “shake up” in the programs and even format of GMA’s good public service programs. Protect his business interests and expand their influence. This is one thing good about GMA, they focus on their “core competency” of having a credible news programs and people. For ABS-CBN, they focus on entertainment which they successfully sustaining and not so much on public affairs because of some credibility issues that has been besieging them. As for TV5, in time you may be the number 1 or 2. Just be patient, because you cannot hatch an egg by hammering it, nor blow a cocoon to bring out the beauty of a butterfly. After all, not everything can be bought by money and Manny (Pangilinan) as well. 



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