Closure of PLDT-Digitel deal postponed to end-July

ABS-CBN News

Posted at Jun 30 2011 12:16 PM | Updated as of Jun 30 2011 08:16 PM

MANILA, Philippines - Philippine Long Distance Telephone Co.'s (PLDT) acquisition of a majority stake in Digital Telecommunications Philippines Inc. (Digitel) is expected to close on July 30, a month later than originally scheduled.

In separate disclosures Thursday, the firms said they agreed to extend the closing date of the transaction, pending approval by the National Telecommunications Commission (NTC).

"The parties remain committed to this deal since it stands to bring substantial benefits not only to the shareholders but also to the consumers and the general public who will all benefit from the combined resources and expertise of the PLDT Group and Digitel. In the end, this means higher quality services being made available to a wider market at affordable prices," PLDT Chairman Manuel V. Pangilinan said.

PLDT will acquire 51.55% of Digitel, after which it would make a tender offer to minority shareholders, bringing the total value of the transaction to about P74 billion.

The deal was supposed to have been sealed on June 30, but it had yet to obtain regulatory approval.

The NTC's nod is the only remaining requirement to be met since the acquisition had been approved by shareholders as well as the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange.

The NTC will hear issues related to the deal tentatively on July 5 to 7 and 12 to 14. Several quarters, including another telco giant, Globe Telecom Inc., have filed their opposition to the PLDT-Digitel deal, saying it was anti-competitive and anti-consumer.

If finalized, the deal will give PLDT a 70% overall share of the local telecommunications market.

Consumer groups were worried the deal might result to the withdrawal of Sun Cellular's bucket-priced promos, which PLDT and Digitel had already assured will not happen.

JG Summit Holdings chairman James Go said "We are confident that soon, the consumers of Sun will reap the benefits of an even stronger and more robust telecom company resulting from the PLDT-Digitel deal."

Meanwhile, the Supreme Court has ordered SEC to probe PLDT for possible violation of the constitutional limit on foreign ownership.