MANILA, Philippines - Globe Telecom has offered to buy up all of Bayan Telecommunications' debt, a move that would bring the Ayala-owned company a step closer to taking over the Lopez-led telecom.
Globe says if the creditors take the offer, the transaction will help accelerate rehabilitation program of Bayantel, and allow for Bayantel and Globe to collaborate and become more effective.
Globe, however, stressed that it has not yet finalized talks with the Lopezes for "collaborative business efforts," and noted that any buy-in or purchase would still need the approval of government.
Lopez Holdings, which holds the Lopez family's Bayantel stake, rose 9%.
The market reaction shows investors see the Lopez group as the big winner here, but what will it do for Globe?
And will it put it at par with industry leader PLDT, which just last year bought Digitel from the Gokongweis to widen its market share further?
"It's a good move for Globe to keep pace with the competition, but as to the immediate result on the company's earnings and revenues, maybe the investing public has to wait and see," said Claire Quiray, analyst at Regina Capital.
PLDT, meanwhile, suffered a 6% drop in its 9 month profits.
This, despite boosting its revenues 12% for the period.
"We continue our steady financial performance as we wait for the industry situation to stabilize. In the meantime, we are maintaining our core profit guidance for 2012 at P37 billion," said PLDT chairman Manuel Pangilinan.
The lower profits were blamed on "severe competitive pressures" and one-time gains from PLDT's purchase of Digitel last year.
But Pangilinan is confident PLDT will continue to have a steady financial performance.
PLDT shares rose over 1%.
Quiray said the positive reaction shows investors had been expecting the lower profits, given earlier reports.
"Profits are always a concern. This is where your dividend and valuation will come in. But with PLDT because it has been reported, I think it has been discounted by the market," she said.
Gains in both Globe and PLDT helped power the PSE index to a new record close today at 5,473.
This is the 25th record breaking close this year alone. - ANC, Business Nightly, November 6, 2012