BizBuzz: Life after GMA 7

As soon as businessman Manuel V. Pangilinan saw that a prospective P52.5-billion deal to take over the “Kapuso” network GMA 7 was crumbling, MVP saw it as God’s sign that he should instead focus on getting his “Kapatid” network TV 5 in good shape, BizBuzz sources said. But how can he plug the P4-billion financial hemorrhage of a challenger to a duopoly?

For starters, a stocks analyst from a foreign investment group said TV5 must build up its pool of young talents, noting many of the talents signed up by the network—while among the best in the industry—may no longer be too attractive to a TV viewership that increasingly favors younger faces. The most popular young talents are already tied up with either “Kapuso” or “Kapatid” because as soon as MVP got his hands into TV5, the two leading players made sure most of their best talents would have sufficient incentive not to jump ship. So pirating any or some of them will only add to TV5’s bleeding. Another option seen is to develop homegrown talents, and this is not impossible, given that MVP has the resources to be a star-maker.

Meanwhile, the collapse of the discussions is not the end of the world for GMA 7. If the triumvirate behind the network is still looking for a golden parachute, they are not bereft of suitors. One of them, not too long ago, had indicated interest to buy GMA 7 at a higher enterprise valuation but payable in a combination of cash and kind (shares of stocks). We won’t be surprised to see GMA 7 talking to this longtime suitor again, if they are not yet doing so now.

On the other hand, there are quarters who refute reports that the collapse of the deal was due to regulatory risk-sharing and “downpayment” issues. GMA 7 reportedly even agreed to give the MVP group one year to secure the congressional approval and that MVP was “agreeable” to the risks and that the “downpayment” had already been agreed upon by both parties early on.

From what we gather, MVP was indeed “agreeable” to the regulatory risks but not to pay for the entire cost of it. What was referred to as the “downpayment” that became a deal-breaker was not necessarily the initial payment as a percentage of the total deal size (which has been fixed) but a euphemism for that off-balance sheet cost of making sure that the deal will proceed. Unfortunately, it didn’t.—Doris C. Dumlao

New alliance

On the other side of the fence, could ABS-CBN Broadcasting Corp.’s capital restructuring be a prelude to the entry of a new strategic investor? This is what many are speculating, especially as news about such restructuring coincided with 1) the recent statements of Globe Telecom president Ernest Cu that synergies are being explored with the “Kapamilya” network and 2) another fund-raising initiative by Ayala Corp. soon after its most recent forays.

With ABS-CBN planning to sell to existing shareholders voting preferred stocks equivalent to 56.7 percent of its total shares, the network seems to be opening its doors to new investors, albeit in a way that strengthens the firewall against any hostile takeover. The signal is that the Lopezes will want to retain majority control. On the other hand, because Globe is partly foreign-owned (by SingTel), there are restrictions on foreign media ownership in the Philippines. So if the discussions are serious, it’s not far-fetched that parent conglomerate Ayala will step in.

Meanwhile, after the PLDT-Digital Telecommunications consolidation, it’s also plausible that the Ayalas will want to join forces with the remaining telecom players. None of the remaining players has a market share significant enough to be a game-changer for now, but consolidating assigned frequencies is part of challenger Globe’s game plan.—Doris C. Dumlao

Buyers beware

They may both carry the Swift name, but only one refers to the processed meat unit of listed RFM Corp. that is up for sale.

RFM issued the clarification to the Philippine Stock Exchange following the spike in the shares of Swift Foods Inc., which used to be the chicken unit of RFM Corp., as some investors thought that SFI was the same as the Swift brand being considered for purchase by Century Canning Corp.

In a letter to the PSE, RFM said that SFI was no longer part of the RFM group nor owned by the majority shareholders of RFM. The Swift brand, however, and the Swift processed and canned meat business remained with RFM, and Century was interested in buying both the brand and the business.

“This transaction therefore is not connected with the other company SFI, which used to be the chicken company of the group but was later spun off and sold to the public,” the disclosure said.

Also, SFI is prohibited from using the Swift brand.—Tina Arceo-Dumlao

Unique casino opens

Midas Hotel and Casino— Manila’s newest leisure and gaming destination—formally opened its doors to casino patrons last week. The former Hyatt Hotel beside the Japanese Embassy along Roxas Boulevard features “smoke-free” gaming floors to the delight of nonsmoking casino patrons.

Aside from overflowing food and drinks, the opening night was filled with glitz and glamor with the surprise appearance of Hollywood heartthrob Zac Efron. Sources say Midas was the official Manila residence of the High School Musical star.—Daxim L. Lucas

Speaking of which…

The young Hollywood sensation became a de facto Philippine tourism ambassador when he raved about his recent trip to Albay during a recent guesting in the popular Ellen Degeneres show.

Efron spoke of helicopter rides around Mayon Volcano, a thrilling all-terrain vehicle ride (featured on his official Facebook page) and lunch on top of Mayon’s lava trail.

While in Albay, Efron was billeted at the plush Misibis Bay Resort on Cagraray Island. Both Midas and Misibis Bay are owned by Bicolano businessman and ecotourism proponent Zaldy Co.—Daxim L. Lucas

Topic ‘insertion’ floors Neda

Technical officials of the National Economic and Development Authority were surprised (to put it mildly) when a seemingly unscheduled topic was brought to the fore during one of their regular meetings last week.

According to a BizBuzz source, the members of Neda’s Investment Coordination Committee technical review team were floored when, as they were about to tackle updates on the public-private partnership (PPP) program, Public Works Secretary Rogelio Singson took the floor to extol the virtues of Metro Pacific Investment Corp.’s NLEx-SLEx connector road project. (Singson was once employed by MPIC as the head of its Maynilad unit.)

This was, of course, after he personally attended the Toll Regulatory Board meeting and objected to the final approval of San Miguel Corp.’s rival (and supposedly higher priority) Citra-PNCC Alignment road project. Remember that no less than President Aquino has mandated that both projects be approved posthaste.

According to our source, normal procedures of unsolicited proposals should require proponents like MPIC to submit documents along with the DPWH evaluation and supporting documents. Instead, the DPWH secretary himself presented the DPWH power point materials which, we were told, looked very much like it was prepared by… uhm… another party.

After the presentation, the technical team, unprepared and unaware of the intentions of the DPWH secretary, was asked to endorse the project for approval of the Cabinet committee ICC. Boom!

Who said there aren’t any curious and unexplained events on the straight and narrow path, huh?—Daxim L. Lucas

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