Spend more for Digitel, PLDT asked

Minority shareholders of Digital Telecommunications Philippines (Digitel) are renewing their calls for network giant Philippine Long Distance Telephone Co. (PLDT) to shell out more money for its acquisition of Digitel.

In a statement, Dioceldo Sy, Edmundo Sia, Gary Lim and Arsenio Tan said PLDT’s tender offer price for Digitel shares of P1.6033 a share seemed fair if based on the company’s valuation on the stock market.

“The fact though is that PLDT bought 51.55 percent of Digitel’s common shares at P69.2 billion (not just P5.3 billion) with the assumption of Digitel’s liabilities consisting of cash advances and convertible bonds due in 2013 and 2014 with a redemption value of about P17 billion,” the group’s lawyer Leah Lumaniog-Sy said.

“The assumption of the conversion is anomalous because at the time of the purchase and even until now, they are still bonds and not shares,” she said.

The said bonds and advances were acquired by PLDT from Digitel’s former parent firm, JG Summit Holdings. This represented the money the conglomerate poured in to subsidize the operations of the telco.

“The sale and purchase agreement (PLDT and JG Summit) signed on March 29, 2011, stated that the said convertible bonds will be due in 2013 and 2014. These bonds can be converted into shares only if unpaid,” Lumaniog-Sy said. The tender offer price for Digitel shares, she said, should be P21.12 each.