MANILA - GMA Network Inc on Monday confirmed talks for a possible investment by San Miguel Corp (SMC), as the broadcast network reported that first-quarter profit fell on weaker revenues.
In a briefing, GMA chairman and CEO Felipe L. Gozon told reporters that he is in talks with SMC president Ramon S. Ang for the sale of a "substantial" stake in the broadcast company.
"Mr. Ang is very interested in buying into GMA. He is very, very interested. There's a confidentiality. I cannot be specific, bawal eh. But, it's very substantial," Gozon said.
Gozon said the discussions with the San Miguel executive started early this year.
When asked why Ang is interested to invest in the broadcast company and if there's synergy with San Miguel, Gozon said, "I don't really understand why Mr. Ang is very, very interested in GMA."
Sought for comment, Ang, in a text message, said "Yes, in talks," but provided no details.
According to earlier news reports, Ang offered to acquire at least 30 percent of GMA for P10.80 per share. This is higher than the P9 supposedly offered by the PLDT Group.
Gozon said GMA did not ignore the offer of PLDT chairman Manuel V. Pangilinan. "He just got tired," Gozon said, referring to Pangilinan.
Pangilinan last Tuesday said his group's offer to acquire shares in GMA expired last February 8.
"There's no offer that's outstanding. No talks at all. We actually don't know what's going on. There are no discussions at all," Pangilinan said.
Last February's talks was the third attempt by the PLDT Group to acquire a stake in GMA.
In October 2012, PLDT and GMA terminated discussions for the telco's buyout of the broadcast firm's major shareholders - the Gozon, Duavit and Jimenez families - who own a combined 79 percent of the network.
Pangilinan had said disagreement over regulatory risk-sharing led to the collapse of negotiations.
Any PLDT acquisition of a broadcast network would have to go through the gamut of regulatory and Congressional approvals. As it already owns TV5, BusinessWorld and Philippine Star -- as well as minority stake in Philippine Daily Inquirer -- PLDT's bid for GMA could attract close scrutiny, if not opposition from certain quarters concerned over the concentration of media power in one conglomerate.
In 2004, PLDT-Beneficial Trust Fund also attempted to buy 66.67 percent of GMA for P8.5 billion. Negotiations bogged down after the fund’s unit, MediaQuest Holdings Inc, cut its offer from P14.58 billion to P12 billion.
Despite the expiration of its talks, Gozon said the network is in talks with PLDT Group and Globe Telecom for distribution of the broadcast company's media content.
"That is a separate matter. The talk with Mr Ang is equity. Here is on the top partnership, our content can be distributed in the platform of Globe or Smart," Gozon said.
GMA's move to partner with telcos came after ABS-CBN Corp had struck a partnership with Globe. The ABS-CBN-Globe partnership would allow the Lopez-owned broadcast company to distribute its media content using the Ayala-led telco's mobile network.
Profit down by 46 pct
GMA on Monday reported that its net income fell by 46 percent to P325 million in the first quarter of the year from P601 million in the same period last year.
Revenues slipped four percent to P2.85 billion from P2.96 billion over the same period.
Despite the weak first quarter, Gozon said GMA management remains optimistic that it would meet targets for the year.
"We expect better numbers in the next few months as our top advertisers have already committed their placements," he said.
"We are confident that our diverse line-up of upcoming shows will help us regain our lead in nationwide ratings and boost our earnings for the coming months," he added.
Data from Nielsen TV Audience Measurement show GMA dominating competition in Urban Luzon and Mega Manila in the first quarter of 2014.
In Urban Luzon, GMA scored a 35.2 percent average total day household audience share, higher by 3.3 points over ABS-CBN's 31.9 percent and 23.8 share points over TV5's 11.4 percent.
GMA also continued to lead in its bailiwick Mega Manila, scoring an average total day household audience share of 36.3 percent, ahead of ABS-CBN's 29.2 percent by 7.1 share points and of TV's 12.3 percent by 24 share points.
Mega Manila represents 60 percent of the nationwide urban TV household population.