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Globe to buy stake in Lopez telco

Sets tender offer to acquire Bayan debts

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Ayala-led Globe Telecom is moving to acquire an equity stake in financially distressed Bayan Telecommunications in a bid to improve its position in the industry dominated by Philippine Long Distance Telephone Co.

In a disclosure on Tuesday, Globe said it has obtained internal approval for the acquisition of all financial obligations of Bayan, which is under corporate rehabilitation.

In separate discussions, Globe said it had reached deals with Bayan’s controlling shareholders, ABS-CBN’s Lopez family, for the acquisition of an equity stake in the company.

The planned transactions come after a recent co-use deal for radio frequencies between Globe and Bayan that allowed both firms to expand their market reach.

“Potentially combining Globe’s assets and capabilities with [Bayan] through collaborative business efforts will enable both companies to become more competitive and help accelerate the completion of Bayan’s rehabilitation,” Globe said in a statement.

Globe said it was in discussions with the Lopez group on the “price and other conditions under which the acquisition may be effected.”

The acquisition of Bayan’s obligations will involve a tender offer to purchase for cash any and all of the 13.5-percent senior notes originally due last 2006 issued by Bayan. The tender offer will push through only if creditors holding at least 70 percent of the debt agree to sell their holdings to Globe.

If the tender offer succeeds, Globe will become the major creditor of Bayan and will perform a role similar to Bayan’s creditors in respect to its rehabilitation plan, including representation in the monitoring committee.

The National Telecommunications Commission (NTC) recently approved Globe’s application for the joint use by Globe and Bayan of the frequencies 1750-1760MHz/1845-1855MHz assigned to the Lopez telecommunication firm.

The joint-use agreement will allow Globe to address increasing demand for voice, SMS and mobile data services and allow Bayan to offer its mobile telecommunications services to customers.

“Our long-term collaboration with Bayan is a strategic initiative that will enable Bayan to unlock and maximize the potential of its key business assets and capabilities,” Globe chief financial officer Albert de Larrazabal said. “I believe this is consistent with the objectives of the NTC and is in the best interests of Bayan’s stakeholders and customers.”

Dominant carrier Smart Communications earlier opposed the frequency co-use deal between Bayan and Globe. Smart, the mobile unit of PLDT, said the NTC should have recalled the Bayan frequencies instead of approving their use by Globe.

Commenting separately on Globe’s possible entry into Bayan, PLDT chairman Manuel V. Pangilinan said the transaction was expected to increase competition in the industry already struggling to keep profit margins up.

He said he expected Globe to end up with a controlling stake in Bayan and that the partnership between the Ayala group, Globe’s controlling shareholders, and the Lopezes, would likely expand to other businesses. “But this is all just speculation on my part,” Pangilinan said.


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Tags: acquisition , Bayan Telecommunications , Business , Globe telecom , Telecommunications

  • http://mikkieugenio.tumblr.com/ Paul Eugenio

    It’s time. Globe-Bayantel will create a significant competitor as huge as PLDT.

  • axe musk

    Wait for sometime at babalik tayo uli sa monopolya sa telecom kasi ayaw ni tita MVP ng my kakompitencya…But the true pinoy businessmen were the Lopezes and the Ayalas and NOT Manny Pangilinan bec. his parent company is Metro Pacific Group which is owned by the Indonesian Billionaire – SALIM FAMILY…. kumita man ng bilyones ang PLDT group sa pamumuno ni MVP, yung Indonesian owner parin ang may mas malaki ang pakinabang….

  • BacolodBoy

    super dropped calls…. service upgrade please…. 

  • ah_ok_fine12

    sana ayusin mo na ng globe yung service nila before acquiring other companies to boost their service.. kug ngmamaganda lang naman ang globe para masabing biggest company sila, then they need to prove it thru their service

    caloocan area globe subscriber got a very poor connection, mapa phone man o internet

    • http://twitter.com/greysaff Greysaff

      binasa mo ba yung article? part of the deal is that globe gets to use bayan’s assigned frequencies. it smells like another merger in the works.

      • ah_ok_fine12

        nabasa ko ang article. kaya nga i was specific kung alin lang dun ang my issue ako.. obviously possible magmerge sila.. palikin at palawakin ang business, ang point ko lang, sana pagandahin ng globe alone ang connection nila

  • RiverHorse

    “Dominant carrier Smart Communications earlier opposed the frequency co-use deal between Bayan and Globe. Smart, the mobile unit of PLDT, said the NTC should have recalled the Bayan frequencies instead of approving their use by Globe.” <<< ayaw talaga ng PLDT ng kakumpetensya 'no?!

    "Commenting separately on Globe’s possible entry into Bayan, PLDT chairman Manuel V. Pangilinan said the transaction was expected to increase competition in the industry already struggling to keep profit margins up." <<< ibig sabihin nde pa kumikita ng malaki si pangilinan??? maniwala ako!!!



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