MANILA, Philippines - NOW with a better offer, GMA Network Inc. has entertained a fresh round of negotiations with Philippine Long Distance Telephone Co. (PLDT).
According to a source, discussions for the company, led by businessman Manuel V. Pangilinan (MVP), to acquire GMA Network Inc. from its major shareholders commenced last month. “We can confirm that there are talks lately. It’s been more than two weeks since the talks started. But definitely talks are moving,” said the source.
PLDT top officials refused to comment but said an announcement will be made “very soon,” some said.
Asked if talks between the two companies are already in the advanced stages, the source said: “Well, were just taking off from where it [ended]. We are just continuing the discussions where we left off. Back then, both sides were very close to finalizing the deal, added the source.
PLDT Board Member Ray Espinosa, said another source, is on top of the negotiations for PLDT’s side. In the past few weeks, Espinosa has been posting in his Facebook account that he has two more deals to close for the year. “Second deal is looking good and deals are like games. You pursue them relentlessly. Make or break week” was his latest Facebook post.
In September last year, the Pangilinan group and the major shareholders of GMA announced the termination of talks for a possible acquisition of a controlling stake in the country’s second-ranked broadcast firm by MediaQuest Holdings Inc., a company under the PLDT Retirement Fund.
Statements from both groups said they had been “unable to arrive at mutually acceptable terms, despite the continual discussions and efforts exerted in good faith.”
They did not discuss why talks were terminated. But a statement from GMA Chairman Felipe Gozon said, “The issues that the parties were not able to resolve had nothing to do with the price.” Should there be another offer in the future from Pangilinan’s group or from someone else, Gozon said: “We are willing to consider.”
From the camp of GMA Network, a source, at that time, said “the MVP Group was agreeable to the risks that came with the said regulatory issues, such as congressional approval.”
“GMA even agreed to give the MVP Group one year to secure the congressional approval,” added the source.
There was no problem with the down payment, and that the initial amount was already agreed upon by both groups early on.
However, another source cited two reasons why the deal didn’t push through last year. First, Gozon—who controls GMA together with the Duavit and Jimenez families—allegedly asked for a non-refundable advance payment, amounting to 10 percent of the deal price.
Second, Pangilinan is expected to face legal problems when the deal is scrutinized by both houses of Congress.
“The scenario they face is this: If GMA’s major shareholders get their advance payment there is still no assurance that the deal would be approved by the NTC [National Telecommunications Commission] and Congress, particularly that election is coming up. Even if the deal is approved before the elections, PLDT will face another headache because by July 2013 there would be new legislators, new heads of the franchise committee, new chairman of the public service committee and maybe new NTC commissioners, etc…,” the source explained.
The source went on to say that money was never a problem for Pangilinan. “The funding was never an issue but the advance payment was,” added the source. The deal was valued at P52 billion last year. MediaQuest made an attempt to buy 66.67 percent of GMA 7 for P8.5 billion several years ago. But the negotiations bogged down after MediaQuest reduced its valuation to about P12 billion.