Pricing derails sale of GMA TV to Pangilinan group
MANILA, Philippines—A P15-billion pricing gulf is threatening to derail what sources say is almost a “done deal” for businessman Manuel V. Pangilinan and his group to acquire GMA Network Inc., people close to both the buying and selling parties said Thursday.
According to one person familiar with the negotiations, the current shareholders of the broadcasting firm that operates top-rated GMA7 are asking for as much as P60 billion from the telecommunications tycoon for 100 percent control of the company.
This represents a 33 percent premium over the P45 billion Pangilinan has reportedly offered for the network to the Gozon, Duavit and Jimenez families, who each control approximately one-third of the listed firm’s voting stock.
“The premium being demanded is a bit steep,” said one source. “It looks like neither parties are willing to yield at this point.”
At Thursday’s closing price of P9.22 per share at the Philippine Stock Exchange, a 100-percent stake in GMA Network was worth P31 billion, although it is customary for buyers to pay a premium for acquisitions that give them controlling stakes in the target companies.
At P45 billion, Pangilinan is willing to pay a premium of about 45 percent to GMA Network’s present market capitalization, while the controlling shareholders are seeking a premium of 87 percent.
Sought for comment, GMA Network chief operating officer Gilberto Duavit Jr. stressed that there was “no done deal” between the company’s shareholders and Pangilinan as yet, indicating that the sellers continued to await a better offer from the head of the PLDT group.
“We are not in serious negotiations as we have not received an acceptable offer,” he told the Inquirer.
At the same time, Duavit said that the PLDT group remains one of the largest advertisers of the network, amid speculation that the telecommunications giant had either eliminated or reduced its ad purchases in GMA in order to force the latter into a weaker negotiating position.
“PLDT has not stopped advertising with us,” he said. “They are on our list of Top 10 advertisers.”
While GMA Network’s ad revenues had indeed dropped sharply in 2011, analysts attributed this to the loss of political ads experienced by most media firms during the 2010 national elections, in addition to a broad reduction in ad spending by large corporations last year.
The current talks for the acquisition of GMA Network mark the third time Pangilinan is attempting to buy the country’s second largest broadcasting outfit. The businessman came close to sealing a deal for 100 percent of the company in 2001 for P14 billion but was ultimately derailed by similar pricing disagreements.
At present, Pangilinan already controls TV5 – the country’s third largest broadcaster – through Mediaquest Holdings, which is owned by the pension fund unit of PLDT.
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