Globe to pay P1.83B for Bayantel stake
Globe Telecom Inc., the country’s second-biggest telecommunication services provider, is moving to buy the Lopez family’s remaining stake in Bayan Telecommunications Inc. (Bayantel), where it already holds a controlling position.
Globe said in a stock exchange filing on Tuesday that it had agreed to pay Bayan Telecommunications Holdings Corp. and Lopez Holdings Corp. P1.83 billion for up to 70.76 million Bayantel shares. The move would increase Globe stake in Bayantel from 56.87 percent to 98.57 percent, according to the filing.
The announcement was expected after the National Telecommunications Commission on July 2, 2015 allowed Globe to convert the Bayantel debt that it had acquired to equity, which gave the Ayala Group-led telco a controlling stake.
The conversion was blocked by rival Philippine Long Distance Telephone Co., which called the move anti-competition and questioned its constitutionality. The NTC, however, eventually sided with Globe.
Bayantel, previously owned by the Lopez family, ran into hard times after the 1997 Asian Financial crisis. Its mounting debts, at the time valued at about $500 million, prompted its entry into corporate rehabilitation in 2003.
The telco’s situation changed when the Lopez family agreed to sell Bayantel’s debts to Globe, a prelude to Globe’s takeover via a debt conversion to equity scheme under a so-called joint application that was filed in 2013.
Globe said earlier that the takeover of Bayantel would “not affect” the latter’s corporate existence and it would be distinct from Globe. It added that the takeover would strengthen Bayantel’s operations while enabling Globe to “address the increasing demand for voice, SMS and mobile data services.”
As noted, the deal was mainly delayed because of the opposition from PLDT and its units.
PLDT raised key points, mainly covering the assignment of the coveted radio frequencies of Bayantel that Globe would acquire and how this was “anti-competitive, anti-consumer” and amounted to an “unfair trade practice.”
It added that should the takeover be approved, Globe should give up Bayantel’s frequencies as these should be auctioned off by the government.
PLDT argued that with Bayantel’s frequencies, Globe would end up with a “disproportionate amount of frequencies” relative to its subscriber base, which is smaller than PLDT’s, thus, giving Globe an unfair advantage.
