MANILA - ABS-CBN Corp and TV5 reached a partnership deal on Wednesday with the Lopez-led media company acquiring shares in the Manny Pangilinan-led network.

In a joint statement on the accord, both parties said the "investment agreement" allows ABS-CBN Corp to acquire 6,459,393 primary (new) common shares in TV5 representing 34.99 percent of the total voting and outstanding capital stock of TV5 for P2.16 billion.

MediaQuest, which currently owns 99.67 percent of TV5, will see its stake reduced to 64.79 percent after the deal is finished. Pangilinan’s PLDT Beneficial Trust Fund owns and controls MediaQuest.

ABS-CBN can also acquire additional shares in TV5, which may increase the Kapamilya network’s stake in the Kapatid network to 49.92 percent after 8 years.

The acquisition of additional shares, which will be done via a convertible note agreement, will be subject to regulatory approvals.

CIGNAL-SKY CABLE DEAL

At the same time, the cable and satellite TV subsidiaries of ABS-CBN and PLDT also entered into a similar deal.

Cignal Cable Corp said it was acquiring 38.88 percent of Sky Cable Corp for P2.862 billion.

“The investment of Sky Cable by Cignal Cable is expected to benefit the former’s existing customer base consisting of over 300 thousand cable subscribers and close to 350 thousand broadband subscribers as of the
end of June 2022,” MediaQuest said.

Similar to the ABS-CBN and TV5 deal, Cignal is also buying an Exchangeable Debt Instrument from Sky worth P4.388 billion, which gives Cignal the option to acquire an additional 61.12 percent of Sky Cable shares.

Cignal Cable will also acquire a Convertible Note issued by Sky Cable worth P250 million and convertible into primary shares of Sky Cable representing about 1.84 percent of outstanding capital stock.

“The proceeds of the sale of the Sale Shares, the Convertible Note and the issuance of the Debt Instrument in the total amount of P7.5 billion will be used to repay certain obligations of ABS-CBN and Sky Vision and to fund
the investment of ABS-CBN in TV5,” MediaQuest said.

ePLDT, a subsidiary of PLDT, Inc., will fund Cignal’s purchase of these shares and debt instruments worth P7.5 billion.

SYNERGIES

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ABS-CBN Chairman Mark L. Lopez said the partnership was an opportunity to help TV5 grow, strengthen its free to air network, and take it “to the next level.”

"For ABS, it presents a fantastic platform for us to achieve synergies in production content and talent management as well as maximizing our content delivery. We look forward to be of greater service to the public as we come together in taking TV5 to the next level," he said.

"I am happy and honored to be able to recognize and say what is a matter of fact: ang ating mga Kapatid ay ating Kapamilya," he added.

Pangilinan, chairman of Mediaquest Holdings, said they welcome the entry and investment of ABS-CBN in TV5.

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“...ABS-CBN has always been the leading developer and provider of Filipino-related entertainment content not only in the Philippines but overseas as well. Our companies have always had these cherished values of providing top and quality programs in the service of the Filipino people and together we believe we can achieve this in greater measure and success," Pangilinan said.

"I think it will raise the level of service to the Filipino people in terms of better content and extensive coverage throughout the Philippines. I think both stations, both media organizations have knowledge channels, channels that relate to education especially to the younger Filipinos so we will continue to promote that...Shared values in terms of public service is very important to both of us," he added.

Carlo L. Katigbak, president and CEO of ABS-CBN, said the deal is aligned with the Lopez-led company’s vision.

“This partnership is consistent with the strategic intention of ABS-CBN to evolve into a storytelling company whose goal is to reach as wide an audience as possible,” Katigbak said.

"In partnership with TV5, we look forward to reaching viewers both on owned platforms and through other broadcast partners, thereby enriching the Philippine creative industry. We hope the industry evolves from being highly competitive to increasingly collaborative, which benefits all stakeholders in the long run," he added.

Katigbak also thanked ABS-CBN's other partners "that have supported us in these difficult times including A2Z, KROMA, Bright Light and GMA."

"We remain committed to our partnerships and, together with TV5, hope to continue working towards your success. We believe we can further enrich our creative industry by continuing to be more collaborative with each other," he said.

PLDT President and CEO Al Panlilio and Mediaquest Holdings President and CEO Jane Basas also attended the signing ceremony.

The joint statement said the "transaction is clearly transformational for both companies and is envisaged to significantly enhance significantly TV5’s capability to deliver content and coverage to the Filipino public in the areas of entertainment, news, sports and public services."

"This is also consistent with the national policy of expanding the private sector’s role of supporting efficient and reliable public services, which TV5 is expected to provide through its nationwide network to provide increased nationwide coverage, especially in remote areas," it added.

The ABS-CBN - TV5 and Cignal-Sky Cable deals are expected to be completed within this month, subject to "fulfillment of certain closing conditions."

Last year, the Kapatid network began showing popular primetime programs of ABS-CBN such as "FPJ's Ang Probinsyano" as well as the long-running "ASAP Natin ‘To" on TV5. This allowed TV5 to increase its ratings.

The law firms of Romulo Mabanta and Quiason Makalintal advised ABS-CBN on the transaction, while AlphaPrimus Advisors and Picazo Buyco Tan Fider & Santos advised the MediaQuest group.

For his part, Infrawatch PH convenor Terry Ridon said the new partnership is a "testament to the enduring quality of content being produced by ABS-CBN, which has remained cutting-edge and relevant despite the previous government’s shutdown in 2020."

"Certainly, adversaries of ABS-CBN at all levels of government will try to sabotage this partnership. In fact, we are already seeing this in Congress, as some congressmen are pushing for inquiries into the deal," he said in a statement.

He added: "This deal is not a franchise issue, as this involves no transfer of controlling stakes requiring congressional approval. More importantly, Congress should focus on more important public concerns, such as economic recovery and social programs, instead of wasting time inquiring on content sharing deals between media entities."

In his statement, Ridon said there may be no basis for the Philippine Competition Commission to strike down the deal since it "does not involve a transaction which will reduce or limit competition."
He noted that ABS-CBN ceased to be the dominant player in the broadcast segment after Congress voted not to renew its franchise.

Instead, Ridon proposed that both parties undertake voluntary review with the Philippine Competition Commission given the size of the transaction and the entities involved.

"This is not compulsory, as the transaction does not meet the current P50 billion threshold for compulsory review," he said.

news.abs-cbn.com is the official news website of ABS-CBN Broadcasting Corp.

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