MANILA (UPDATE) - Telecoms tycoon Manny Pangilinan has withdrawn his bid to acquire Sky Cable Corp from the Lopez Group due to worries that antitrust regulators may flag the deal.
"We withdrew from the bidding for ABS-CBN's SkyCable since there might be a risk local competition authorities might reverse the transaction a year after the effect of Bayanihan 2," Pangilinan said during a briefing on PLDT’s third quarter financial results.
Pangilinan is chairman, president and CEO of PLDT, which operates Cignal TV Inc, a Philippine satellite television and IPTV provider, under the PLDT Beneficial Trust Fund.
Cignal directly competes with Sky's pay TV division, while PLDT's home broadband division competes with Sky Fibre.
The Bayanihan to Recover As One Act or Bayanihan 2, exempts transactions with values below P50 billion from being reviewed by the Philippine Competition Commission (PCC) if entered within 2 years from the effectivity of the law. It also suspended the PCC's power to review these transactions by itself for 1 year.
Prior to the new rules, merger deals worth P2.4 billion and above were subject to PCC review.
But Pangilinan said they were worried that the PCC may review a possible deal with Sky “one year after the effectivity of the act (Bayanihan 2) and possibly reverse agreements which may have been struck in the course of that first year."
He added that the PCC may eventually require them to divest.
"When the Bayanihan 2 was passed, we put an offer to ABS [CBN], but on further review of the Act by ourselves and by our legal counsel, we were told about this risk of possible divestment by us on review starting the second year of the act," he said.
ABS-CBN Corp, the parent firm of Sky meanwhile clarified that Pangilinan's bid for its paid TV and broadband service unit was unsolicited.
"PLDT's bid was unsolicited and withdrawing their bid is their prerogative. This has no impact on the operations of Sky Cable," said Kane Errol Choa, ABS-CBN Corp Head of Corporate Communications
Sky Cable Corp and ABS-CBN are part of the Lopez Group of companies.
news.abs-cbn.com is the official news website of ABS-CBN Corp.
- With a report from Bruce Rodriguez, ABS-CBN News