PLDT acquisition of GMA needs congressional nod

The proposed acquisition by telecommunications giant Philippine Long Distance Telephone Co. (PLDT) of broadcasting company GMA Network Inc. will be submitted for approval by Congress when its first regular session opens this June.

This developed as PLDT president and chief executive officer Manuel V. Pangilinan told The STAR he is not interested in buying an eight-percent share in broadcasting giant ABS-CBN.

Benpres Holdings, the holding company of the Lopez group, has confirmed that they are looking at the posibility of reducing the Lopezes’ share in ABS-CBN from 59 percent to 51 percent in order to raise funds for some of its losing subsidiaries, such as Bayan Telecommunications.

"What will I do with eight percent? It would be better for them to just sell it to the market," Pangilinan said.

Pangilinan is known to demand a majority stake in any company that he wants to invest in.

In the case of the SkyCable-Home Cable merger, the Lopez and Pangilinan groups will have an equal stake in the company that will operate both cable outfits, even though SkyCable of the Lopez group has a much bigger market share and assets than PLDT’s Home Cable.

Meanwhile, the PLDT chief told The STAR that the purchase by PLDT of a 66.67 percent majority stake in the country’s second largest broadcasting firm needs congressional approval.

PLDT, through its wholly owned subsidiary Mediaquest Holdings Inc., had entered into a memorandum of understanding with GMA to buy a majority stake in the latter for P8.5 billion.

PLDT officials said the acquisition will have to wait until the second half of the year as both companies must wait for Congress to deliberate on the proposed deal.

Earlier, GMA president Felipe Gozon said that it may take two to six months before Congress approves the transfer of shares. The operation of a public utility involves the issuance of a legislative franchise, and even transferring the franchise will need congressional approval.

For his part, National Telecommunications Commission (NTC) commissioner Eliseo Rio told The STAR that the commission will have to wait until after Congress’ approval of the franchise transfer before any permit to operate by the new entity is issued.

Pangilinan also said that the due diligence on both the financial and operational aspects of GMA is still ongoing.

He also revealed that talks with a third party foreign strategic partner are still going on. The foreign partner is expected to contribute not only additional funds for the purchase but also technical expertise.

Mediaquest and GMA are said to be in talks with at least five prospective foreign investors. Pangilinan said some of these are big names in the foreign broadcasting industry and could help GMA air some shows abroad.