More than a year of meticulous preparations and negotiations dissipated into thin air.
This is the likely sentiment of the executives, government regulators, lawyers and financial advisers who dedicated a part of their lives working on the P6.75 billion sale of the Lopez family’s Sky Cable, majority owned by ABS-CBN Corp., to telecommunications giant PLDT Inc.
The parties were all waiting for the critical nod from the Philippine Competition Commission. This was finally granted last month and then the unthinkable happened: the deal imploded, with the termination announced through a brief public disclosure.
Neither party provided explanations, but PLDT and ABS-CBN described the decision as a mutual agreement.
Behind the scenes, sources told Biz Buzz the abrupt decision to end the deal stemmed from PLDT, which wanted to include new conditions late in the negotiations and sought to reduce the payment amount.
And by reduce, we’re told the final amount was much smaller than the original offer.
Drastic changes in PLDT’s terms
One source said PLDT’s top brass decided there was little value in paying for aging technology, although we wonder why this was not determined earlier in the due diligence process.
The deal was signed a year ago in March. But such agreements are usually hashed out several months prior. Readers with sharp memories will recall this was a period that coincided with PLDT’s massive budget overrun controversy, triggering management changes and stricter controls at the telco giant.
It’s a setback for ABS-CBN but we understand the media giant has ample resources to meet debt payments.
Of course, Sky Cable has a considerable number of valuable subscribers, which is what made the deal attractive.
Speaking of subscribers, many were dismayed by the confusing developments after they were told that SkyCable is signing off just before midnight on on Feb. 26.
This will no longer push through and SkyCable subscriptions will continue.
Those who immediately switched providers now find themselves locked in with the other major alternative which, as you correctly guessed, is PLDT’s pay television service Cignal TV.
In the unusually calm aftermath, some on the inside wonder what it was all for. Because like the air it vanished into, it feels like it was just empty talk. —Miguel R. Camus