Biz Buzz: ‘LQ’ or deal breaker?

Philippine Long Distance Telephone Co. chairman Manuel V. Pangilinan has likened the kinks over the talks with selling shareholders of GMA Network Inc. to a lovers’ quarrel, or “LQ.” But what is really the source of the LQ? Is it enough to be a deal breaker?

Biz Buzz learned that the current source of the deadlock between the prospective buyers and sellers (after already moving close to an acceptable pricing) is the amount of down payment that the triumvirate behind GMA 7 wanted MVP to lay on the table.

As we all know, congressional approval is needed for any deal to be consummated. But while MVP’s group may be willing to pay P52.5 billion in cash for the whole of GMA 7 based on an enterprise valuation for 100 percent of the broadcast firm, the question is how much cash he will agree to pay in “advance.”

Given the anti-trust issues that cropped out when PLDT took over rival Digitel, will MVP face an easier sailing getting approval for this GMA 7 takeover, especially when it’s Congress he has to deal with? The answer is that this will be a more daunting task.

However, our sources say the amount of down payment sought by GMA 7 is sizable enough for MVP to budge, knowing the risk such advance payment can be forfeited. In other words, the sellers will have guaranteed proceeds at the buyer’s expense in the event that Congress scuttles it.

But while the LQ can turn into a potential deal breaker, MVP has so far expressed confidence that the transaction can still push through. The funds are ready, after all, but in the end, it will boil down to how much of it he will agree to cough out ahead of getting an imprimatur from both houses of Congress.

In the worst case, however, MVP must be thinking he may just as well channel more funds to TV5 if he can’t bring home the bacon this second time around.—Doris C. Dumlao

New CIMB guy

Malaysian banking giant CIMB, which recently bought Bank of Commerce from the diversifying San Miguel group, has found a suitable Filipino guy to head its operations in the Philippines, erstwhile the missing link in its Southeast Asian expansion agenda.

According to the reliable grapevine, Credit Suisse First Boston (CSFB) managing director for the Philippines Simon Paterno is joining CIMB to become the president of Bank of Commerce, subject to approval by the Bangko Sentral ng Pilipinas of CIMB’s purchase of a controlling stake in Bank of Commerce. If all will go as planned, Paterno will assume the post before the year ends.

Prior to CSFB, Paterno served as president of the state-owned Development Bank of the Philippines, but his long stint was as an investment banker at JP Morgan for 18 years, with stints in New York and Hong Kong. A Stanford MBA alumnus, Paterno is an Atenean (graduated cum laude in AB Economics, honors program in economics) and a 1999 TOYM (Ten Outstanding Young Men) Philippines awardee for investment banking.

With Paterno’s upcoming departure from CSFB, the latter will be led by Chiqui Huang. CSFB has likewise beefed up its ranks by hiring a new guy, Johnny Escaler, previously from Goldman Sachs.—Doris C. Dumlao

Wanted: Next DoE chief

The search is on (again) for a new energy secretary to replace Rene Almendras at the Department of Energy, according to our sources. Almendras has long been slated to be moved to the Presidential Management Staff, but this has been delayed by the absence of a “viable alternative” (apart from the political calisthenics inside the Palace, of course).

The energy slot was going to be given to Liberal Party stalwart Representative Joseph Emilio Abaya, but this plan has now been overtaken by events, with the Annapolis graduate now being appointed to head the Department of Transportation and Communications.

The thing is, Abaya was not even going to get the DoE slot initially, with the President supposedly having already chosen accountant-lawyer Noel Bonoan for the post.

Word on the street, however, is that P-Noy changed his mind after someone—who was feeling threatened by Bonoan’s impending appointment—whispered something to the President.

So … the search for a DoE chief continues.—Daxim L. Lucas

iPhone 5 landing soon

If rumors spreading online are any indication, Apple is getting ready to launch the latest model of its widely successful iPhone—dubbed the iPhone 5—this month.

The question that Filipino smartphone enthusiasts are now asking is: When will the iPhone 5 be made available locally?

As in the past, iPhone units are often made available at retailers in Greenhills within days of them being launched by Apple in the United States (at a steep price premium, of course).

However, according to people in the know from local telecommunications firms, the Philippines—being a hot market for smartphone makers due to its tech-savvy consumers—will not have to wait very long for legitimate iPhone 5 units. Chances are, the Philippines will be included in the second wave of countries (in the league of Hong Kong and Singapore) where the iPhone 5 will be launched. The dramatically shortened lag time is likely due to Apple’s desire to cap the popularity of the Samsung Galaxy S3.

Incidentally, there are rumors that the iPhone 5 will have dimensions similar to that of the Galaxy S3 (i.e. bigger touchscreen) and will probably run on 4G Long Term Evolution mobile phone networks that both Globe Telecom and Smart Communications are now rolling out. As usual, expect both telecommunications firms to try to outdo each other’s iPhone 5 launch events.

So … will the iPhone 5 be here by Christmas? Definitely. Possibly as soon as October, in fact.—Daxim L. Lucas

Speaking of Globe…

Globe Telecom and its rivals are in the middle of a battle royale for market dominance, with the latter using an aggressive negative ad campaign to capitalize on the former’s network troubles (caused, in part, by an ongoing $700-million system upgrade).

A cursory glance at various social media fora will show that, indeed, a lot of people have been complaining about the quality of Globe’s service, especially in terms of dropped calls, delayed SMS delivery or slow data speeds.

So we checked Globe’s subscriber numbers and found out that, during the latest reporting period (when complaints were at their loudest) the Ayala-controlled firm had gained (net of “churn”) 52,000 postpaid subscribers. During the same period—and despite Globe’s network issues—its rival gained 19,000 postpaid subscribers.

So, what gives? Apparently, while subscribers are complaining, most have chosen to just wait patiently another month or so for the service to normalize.—Daxim L. Lucas

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