PLDT buys stake in Meralco unit, continuing expansion mode
MANILA, Philippines —After acquiring Sky Cable’s broadband business, PLDT Inc. is making another investment by purchasing a 34.9-percent stake in a Manila Electric Co. (Meralco)-owned telco for P2.12 billion, a move seen to further expand the telecommunication giant’s footprint in the competitive industry.
The Pangilinan-led telco, in a disclosure on Wednesday, said its board of directors had approved the subscription of 2.49 million shares in Radius for P849.28 each. Both Meralco and PLDT are under the helm of tycoon Manuel Pangilinan.
“By leveraging on the existing infrastructure and cobuilding in key areas, both PLDT and Radius stand to gain cost efficiencies,” the listed company said.
READ: Meralco’s RED Fiber downplays competition with PLDT
Radius has a congressional franchise to construct, install, establish and operate telecommunications services. Its fiber facilities span 150 enterprise buildings, over 200 residential villages and more than 200 villages.
PLDT, on the other hand, has covered 17.31 million homes and laid out 1.1 million kilometers of fiber cable, based on latest data.
Regina Capital Development Corp. head of sales Luis Limlingan said the impact of the deal on PLDT’s customers would only be “minimal” given the smaller presence of Radius.
Nevertheless, he said the “acquisition would allow PLDT to capitalize on Radius’ current facilities and unlock synergies in network coverage.”
The transaction is still subject to closing conditions, including completion of due diligence review, procurement of necessary internal corporate and regulatory approvals and execution of definitive agreements.
READ: PCC approves sale of Sky Cable broadband business to PLDT
Prior to this, PLDT also bought Sky Cable’s broadband business and other related assets for P6.75 billion. The deal is still being finalized but the ABS-CBN Corp. unit has announced its transition to internet service provider as it ceases cable operations.
The transaction, announced in March last year, involves the sale of all Sky Cable’s 1.38 billion common shares. Each share is priced at P4.9043, which is based on the agreed equity valuation of the Lopez company.
The completion of the transaction will result in a full consolidation of Sky in PLDT’s financial statement.
