Quantcast
Latest Stories

Pangilinan, GMA 7 talks collapse over price, down payment

By

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


Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

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




Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
  1. Fr. Suarez says last Mass on Easter before returning donated land to San Miguel
  2. Chinese lawyers say they were tortured by police
  3. Hair salon’s Kim Jong Un poster riles embassy
  4. Siquijor ‘healer’: For every cure, there’s a plant
  5. Why college grads end up in the PNP
  6. Miraculous image makes Gapan City top site for pilgrimage in Central Luzon
  7. I’ll follow my conscience on Estrada, says JV Ejercito
  8. Five men from Cavite found dead in jeep in Batangas
  9. Town, DENR play tug-of-war over crocodile
  10. Suspect in Vhong Navarro mauling tries to leave PH
  1. Suspect in Vhong Navarro mauling tries to leave PH
  2. Massage attendant arrested on rape complaint filed by Japanese tourist
  3. ‘Tell no one’ Makati bettor won P250M lotto
  4. MH370 co-pilot made mid-flight phone call – report
  5. Netizens cry: 6/55 Lotto was rigged
  6. ‘Wife of Jesus’ theory papyrus not fake – Harvard study
  7. North Korea uses flamethrower to execute official
  8. ‘King’ Yabut and I: Driver bares Makati dad ‘abuses’
  9. Gay college instructor arrested for oral sex with student
  10. It was difficult having Japanese blood
  1. KL confirms Malaysian Airlines Flight MH370 ended in Indian Ocean
  2. MRT passengers pass the hat for 6-year-old Ashley
  3. Pork payoffs to newscasters Erwin Tulfo, Del Prado, others bared
  4. UP back on top as ‘average’ student aces bar
  5. Rookie, lady cops lauded for quick response to MOA heist
  6. Model Helena Belmonte wished ‘to slash her wrist and hope to die’
  7. Malaysia averts another air tragedy; pilot lands troubled plane safely
  8. Revilla says he was joking; Lacson stands by his story
  9. Revilla ‘consulted’ Lacson on how he evaded arrest
  10. Police rule out foul play in Helena Belmonte’s death as boyfriend is ‘traumatized’
Advertisement

News

  • Kim Henares needs a reprimand, says Cayetano
  • AFP denies hand in disappearance of Tiamzon’s gardener
  • PH gov’t to verify MILF presence in Basilan clash
  • Padaca ‘eager’ to air side on trial over graft, malversation raps
  • DPWH to favor road rehab over preventive maintenance in next 2 years
  • Sports

  • Power Pinoys salvage 7th place in Asian men’s volley club championship
  • Knicks prevent Nets from clinching fifth seed
  • Arsenal beats West Ham 3-1 in Premier League
  • Memorial service marks Hillsborough anniversary
  • My ideal weight is 140, declares Pacquiao
  • Lifestyle

  • Celebrate Easter Sunday at Buddha-Bar Manila
  • Moriones feast: A slow, steady transformation
  • Weaving ‘palaspas’ a tradition kept alive in Tayabas City
  • Finalists announced for best translated books
  • Summer treat for your aspiring astronomers
  • Entertainment

  • Deniece Cornejo posts bail—report
  • Miley Cyrus hospitalized, cancels US concert
  • Otaku Summer Jam 2014: Summer’s hottest J-rock/Cosplay event
  • 2NE1 returns to Manila with “All Or Nothing” Tour
  • Gary Valenciano just keeps moving
  • Business

  • I-Remit teams up with Lakhoo for remittances from Oman
  • Megawide nets P1.4 B in 2013
  • Longer TRO sought on rate hike
  • Make a stylish statement with the all-new Yaris
  • Hearing set in Olarte case
  • Technology

  • Smart phone apps and sites perfect for the Holy Week
  • Tech company: Change passwords or suffer ‘Heartbleed’
  • Filling the digital talent gap
  • SSS to shut down website for Holy Week
  • Another reason to quit social media this Holy Week: your safety
  • Opinion

  • We may never know
  • Couple of things
  • Mommy D’s magic
  • Stop bizarre and bloody Good Friday rituals
  • Holy Week taboos
  • Global Nation

  • 2 PCG men ordered arrested over Balintang Channel shooting
  • US Embassy closed on Holy Thursday, Good Friday
  • Relief worker draws inspiration from helping Yolanda victims
  • Philippines says peace pact should hold despite clashes
  • No travel restrictions to Middle East amid MERS-CoV scare
  • Marketplace
    Advertisement