Wednesday, October 26, 2011
MANILA - Philippine Long Distance Telephone said yesterday it had completed a $1.6-billion deal to acquire a local rival in what would likely become the largest corporate buyout in the country’s history.
The dominant carrier, also known as PLDT, secured all regulatory approvals required to acquire a 51.55 percent stake in Digital Telecommunications Philippines Inc. (Digitel), the two companies said in a joint statement.
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The P69.2-billion share swap would be followed by a mandatory tender offer for the remaining publicly held shares of Digitel and divestment by PLDT in a unit that owns so-called 3G telecom frequency.
“If fully taken up, the tender offer would bring the total transaction value to P74.1 billion, making it the largest buyout in Philippine corporate history,” the joint statement said.
The acquisition of Digitel’s majority stake itself was initiated in March but completed only on Wednesday after regulators had made sure it did not create a potential monopoly.
The buyout leaves JG Summit of aviation and property tycoon John Gokongwei, the country’s third-richest man, with a 12.9 percent share of PLDT.
The joint statement said the two sides had agreed to let JG Summit sell some of its PLDT stocks to fellow shareholders First Pacific Co. Ltd. of Hong Kong and Japan’s NTT Docomo Inc.
After these separate transactions, JG Summit would own about 8.0 percent of PLDT, it added.
PLDT, Digitel and Globe Telecom, a joint venture between the Philippines’ Ayala Group and Singapore Telecom, dominate the Philippines’ fiercely competitive
telecommunications sector.
Listed PLDT closed 1.04 percent higher to P2,330 earlier yesterday while JG Summit added 1.78 percent to P25.70.
Digitel rose 0.65 percent to P1.54.
In a press statement, Globe head of corporate legal services group Froilan Castelo said, “The approval of the joint application with condition to divest PLDT’s 10Mhz 3G frequency is a progressive step for the NTC in promoting consumer welfare and fair competition.”
“Given the length of time this deal has been discussed by several authorities in the government, the media, and private sector, the decision of the regulatory body upholds its support to the industry, ensuring equal opportunities among players to compete, and allowing consumers to enjoy quality services from their chosen service provider,” he said. (AFP/With PR)
Published in the Sun.Star Cebu newspaper on October 27, 2011.
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