PhilStar - MediaQuest deal not pushing thru?

ABS-CBN News

Posted at Jan 27 2011 07:48 AM | Updated as of Jan 27 2011 08:08 PM

MANILA, Philippines - Will the deal between MediaQuest Holdings Inc and The Philippine Star Group of publications ever push through?

On Jan. 25, MediaQuest's chair, Manuel Pangilinan, gave a hint.

According to a BusinessWorld report, when asked about acquisition plans of the diversified conglomerate affiliated with MediaQuest, Pangilinan said the company was “not looking at the moment” at buying PhilStar.

This is the first time an executive has doused cold water on a deal that has been anticipated for almost 2 years.

Negotiations between PhilStar and MediaQuest were first reported in January 2009.  

MediaQuest, effectively the media arm of the Pangilinan-led and Salim-controlled Philippine conglomerate, had originally wanted to close the deal by April 2009. This deadline was moved to July 2009.

Talks reportedly hit a snag as MediaQuest sought a controlling stake of up to 87.5%, while the controlling stockholders supposedly wanted more than the reported P4 billion price tag.

Until May 2010, officials of MediaQuest still expressed interest in PhilStar. Pangilinan said the inclusion of PhilStar is part of its "organic media convergence" strategy,  while Ray Espinosa, then the head of MediaQuest, told reporters the PhilStar deal was "still a go." 

Previously, Espinosa had hinted that the negotiations have been "regarding the structure, extent and pricing of MediaQuest's investment" in the Star Group. 

The Belmonte family owns majority stake in the publication while the estate of the late journalist Max Soliven accounts for over 20%

Pangilinan, in his private capacity, has long been a minority stockholder in Philippine Star, holding about 10%.

Pangilinan is known to pursue business deals where the conglomerate would have a controlling stake.

MediaQuest is currently the corporate vehicle of the conglomerate for its media business. It has a 30% stake in another publication, BusinessWorld.

Pangilinan-led Associated Broadcasting Corp. (ABC) television network also has a 10% stake in another daily newspaper, the Philippine Daily Inquirer.

This print media were supposed to be part of the conglomerate's "content play" strategy.

The conglomerate has a profitable delivery platforms, including telco giant Philippine Long Distance Telephone Company (PLDT) and wireless industry market leader Smart Communications.

Since MediaQuest has also 100% stake in ABC, the broadcasting industry's third largest and aggressively growing player, which carries the TV5 brand.

Pangilinan has reportedly proposed a deal between the Philippine-based TV5 and Indonesia-based Indosiar, a publicly listed national television station in Indonesia majority owned by Salim and TV5. 

Aside from its telco and broadcasting units, also included in the media portfolio of the Pangilinan-led conglomerate are a network of radio stations under the Nation Broadcasting Corp umbrella.