MVP to drop PLDT-Digitel deal if no regulatory approval by Aug. 26


Posted at Aug 18 2011 06:27 PM | Updated as of Aug 19 2011 10:42 PM

MANILA, Philippines - Philippine Long Distance Telephone Co. (PLDT) chairman Manuel V. Pangilinan said he will no longer pursue the company’s deal with Digitel if it fails to secure regulatory approvals by August 26.

The deal, which allows PLDT to buy a majority stake in Digitel, was originally supposed to close on June 30, but was subsequently moved to July 30. Both parties have yet to gain approval from regulators for the deal, prompting them to move the closing date to August 26.

"We have extended that until 26 of August and if nothing would happen by that time then maybe we will just call it a day. We will just move on and Digitel can move on as well and all of this hullabaloo will just die down," said Pangilinan on Wednesday night.

However, Pangilinan clarified that this was his own personal view and this was what he would do if the National Telecommunications Commission (NTC) fails to come out with a decision by August 26 or if it issues an unfavorable decision.

"I am just reflecting my view. I can't speak for the other party but for me, my personal feeling, is that this has gone too far. If it's not meant to be then it's not going to happen. Let's move on. PLDT won't die because of it," he said

Last April, JG Summit Holdings, parent firm of Digitel, signed an agreement involving the PLDT’s purchase of all the rights, title and interest in and to various assets with JG Summit, Express Holdings, Inc., Solid Finance, Ltd. and Elizabeth Yu Gokongwei, who are the registered and beneficial owners of a total of 3.27 billion shares of common stock in Digitel.

A part of the enterprise assets purchased by PLDT is a total of 3.27 billion shares of common stock, representing approximately 51.55% of the issued and outstanding capital stock of Digitel. As payment for the assets, PLDT agreed to issue 27.67 million new shares of common stock at the issue price of P2,500.00 per share.

NTC Commissioner Gamaliel Cordoba is confident it would be able to issue a decision before August 26.

"It's enough time. We will decide on it before August 26 because August 26 is a holiday in Quezon City," Cordoba said, when sought for comment.

The NTC’s legal department wrapped up hearings earlier this month. NTC hearing officer Dennis Babaran had said that legal issues will be tackled by his department but the commissioners will still have the final say.

"The deal has economic implications as well. We have to consider the consumers how they will benefit or be affected by this," said Cordoba.

Consumer groups TXTPower.Org.Inc. and Txtm8 Tayo Consumer Group, Inc. are opposed to the planned deal, saying this will limit consumers' options if PLDT takes control over a competitor.

Without approval from the NTC, PLDT and Digitel could not close the transaction valued at P69.2 billion.
However, Pangilinan remains optimistic that the NTC will be able to meet PLDT and Digitel's August 26 target date. " The hearings were concluded a few weeks ago already. But it's their call not ours," said Pangilinan.

If Pangilinan does drop the bid, it will be the second time in a decade that PLDT and the Gokongweis have failed to get together. The Gokongweis had an agreement to buy PLDT in 2002 but let it lapse due to opposition from Pangilinan himself.