MANILA, Philippines—The merger deal between the Philippine Long Distance Telephone Co. and the Digital Telecommunications Philippines Inc. (Digitel) is still on the table but the parties will no longer set any deadline to close the transaction that has taken longer than expected to get government clearance.
PLDT chairman Manuel V. Pangilinan told reporters on Monday that the agreement between the PLDT and the Gokongwei-led telecom firm was written in such a way that the deadline for the closing of the transaction could be extended if government approval was hanging.
“Neither the Gokongweis or ourselves have terminated the agreement, so you could say (there’s) tacit extension,” Pangilinan said at the sidelines of Philex Petroleum Corp.’s listing by way of introduction on the Philippine Stock Exchange.
Pangilinan said the parties would no longer put any deadline date on the deal closing so as not to be misconstrued as giving an ultimatum to the government.
The August 26 deadline extension previously set by the parties, Pangilinan said, was only meant for the Gokongwei group to qualify for the cash dividends approved by the PLDT in July.
“It’s just a simple record date for paying dividends. The Gokongweis wanted to receive the dividend if they were shareholders from that date,” Pangilinan said.
For thereon, Pangilinan said the parties would no longer put any deadline date, but he said this didn’t mean that they would indefinitely wait for government clearance.
If indeed the government will approve the deal subject to certain conditions, if any, he said the parties would study those conditions. There were earlier reports that if Malacañang approved the deal, it would require the merged entity to reduce their combined telecom frequencies.
PLDT inked last March with the Gokongweis a share-swap deal with an equity value of P74.1 billion. Under the deal, JG Summit Holdings will give up a 51.55 percent stake in Digitel in exchange for a 12.8-percent stake in PLDT, whose single biggest stockholder is the First Pacific Co. Ltd. of Hong Kong led by Pangilinan.
The acquisition by PLDT of the country’s third-largest telco player will cement its dominant position in the maturing Philippine telecom sector and give it a hefty combined market share of nearly 70 percent of the wireless business versus Globe Telecom’s about 30 percent.