Franchise issue may delay MVP takeover of GMA7

Philippine Long Distance Telephone Co. (PLDT) group’s widely expected takeover of television station GMA Network Inc. may be delayed to next year due to the need to seek congressional approval for the deal, executive Manuel V. Pangilinan said.

Nevertheless, Pangilinan, who chairs PLDT, said preparations are ongoing to raise cash to pay for the majority stake in GMA, if and when both camps agree on a price.

“We’re already talking to our banks,” Pangilinan said on Thursday.

But he added that the company would rely mostly on cash to pay for a majority stake in GMA. Loans would only fund a small portion of the transaction, he said.

He explained that the PLDT group and the Duavit, Gozon, and Jimenez families that control GMA, would both work to have an agreement before the year ends.

Whether PLDT can take over the company in 2012, however, was still unsure.

“That deadline is beyond our control because we still need to get approval from both houses of Congress and the NTC (National Telecommunications Commission),” Pangilinan told reporters, speaking at the sidelines of the contract signing for PLDT’s co-branding deal for Henry Sy’s Mall of Asia Arena.

Either camp has been mum on details of the negotiations, but the Inquirer reported this week that both sides have agreed on a price of P52.5 billion for about 80 percent of GMA.

Pangilinan said PLDT’s affiliate, MediaQuest Holdings, would most likely acquire GMA’s common shares, while PLDT would pick up Philippine Depository Receipts, a form of equity reserved for foreigners.

Under the Constitution, foreigners are not allowed to have voting shares in media companies.

PLDT is controlled by Hong Kong’s First Pacific Co. Ltd. and Japan’s NTT DoCoMo. But MediaQuest is owned by PLDT’s Beneficial Trust Fund, which would allow the group to skirt restrictions on foreigners.

MediaQuest Holdings controls other key media assets, most notably, Associated Broadcasting Corp., operator of GMA’s rival television network TV5.