Biz Buzz: ‘A few hundred million among friends’

WHAT’S a few hundred million pesos among friendly billion-peso telecommunications conglomerates? A lot, apparently.

A subtle publicity war is now being waged below the radar over which party would be responsible for shouldering the cost of buying out the remaining shareholders of Liberty Telecom who hold some 12.8 percent of the company.

Liberty’s new owners—Globe Telecom and PLDT—are willing to pay the rest of minority shareholders only P2.20 a share, arguing that Liberty no longer holds the key 700 MHz broadband frequency that the industry was lusting after.

That may be a case of splitting hairs because that frequency in question is now under the control of the two telecommunications giant as part of their P70-billion buyout of San Miguel Corp.’s mobile telephony business.

According to our sources, there was, in fact, no cancellation of the 700 MHz frequency’s assignment to Liberty but was instead a “co-use” agreement between the firm and its sister company BellTel, in the process of San Miguel rolling out its mobile internet service.

Of course, a radio frequency, per se, has no actual monetary value until its potential is realized through actual use, and that’s what Globe and Smart have been doing these past few weeks, having regularly announced the rollout of improved services with each new 700 MHz cell site. They’ve been using it and earning from it.

But tell that to Liberty’s minority shareholders who now stand to make only P2.20 a share instead of the originally computed P5.02 “fair value” price.

After paying P70 billion for the coveted frequency, perhaps shelling out an extra P467 million on top of the P365-million cost of the tender offer is proving a little more difficult for the buyers to swallow? Daxim L. Lucas

How low?

IF BROKERAGE house Papa Securities—author of the research report “Screwing Liberty” that explained what minority investors lament as a messed-up valuation for Liberty Telecoms Holdings—thinks that a P2.20-a-share tender offer is too low, then how much is  the right valuation for Liberty?

As soon as Globe Telecom and PLDT Inc. first said they were studying the possibility of making a tender offer after buying Liberty’s parent firm Vega Telecom, Papa Securities performed its own valuation exercise and came up with an estimated fair value of P5.02 a share for Liberty in an earlier research note dated June 8.

This number came out after subtracting the carrying value of Vega’s other telecom subsidiaries from PLDT and Globe’s P69.1-billion purchase price of Vega. After deducting the assumed liabilities of P17 billion, equity in Vega was at P52.1 billion. Less Vega’s investment in telco subsidiaries other than Liberty and High Frequency Corp. (the two units that hold most for the coveted 700 Mhz frequency), the value of Liberty and High Frequency was estimated at P36.89 billion. Further deducting around P4 billion in estimated value of High Frequency based on its prorated share of the 700 Mhz frequency, Liberty’s value was isolated at P32.8 billion. Divided among outstanding common (1.29 billion) and voting preferred (5.24 billion) shares, this was how Papa Securities arrived at a fair value of P5.02 a share for the tender offer.

This was, of course, long before finding out about the reassignment of highly valued frequencies held by Liberty that apparently reduced its valuation by the time the tender offer price was set. Liberty’s prized possession—the frequency held by Tori Spectrum (formerly Wi-Tribe)—had apparently been assigned to sister company BellTel since March 2015 without any disclosure and that Liberty apparently did not get even a single centavo in return, Papa Securities said in “Screwing Liberty.” As such, the value of the frequencies was not considered during the valuation when the telecom assets were sold to PLDT and Globe.

Both the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE) are now looking into the matter. Doris Dumlao-Abadilla

Women power

WORKING behind the scenes no more, Filipino women are making their mark not just in their home country, but across the world as well.

The San Francisco-based non-profit Filipina Women’s Network paid tribute to a number of these hardworking and influential individuals—100 of them to be exact—via the recently concluded Global FWN100 Awards held in Cebu. A good number belonged to the who’s who of the local business community, led by FWN hall of famers like Marianne Hontiveros, chair of Air Asia Philippines.

Also included in this year’s roster were Maria Victoria Cuisia, president of the Asean Women’s Circle and wife of Philippine Ambassador to the US Jose Cuisia, Theresita Q. Dumagsa, project director for Real Medicine Foundation in Florida, and Maria Milagros Fernan-Cayosa, regular member representing the Integrated Bar of the Philippines.

Awardees also included lawyer Lorna Patajo-Kapunan; Malou Santos, chief operating officer of ABS-CBN’s Star Creatives; Elena Villanueva Romero, founder of Stratos Public Relations Consultancy, and Cebu’s “chocolate queen” Raquel Choa.

As noted, a good deal more were recognized that evening. Needless to say, these women leaders clearly intend to contribute much more to society. May their tribe continue to multiply. Miguel R. Camus

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