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MANILA - (UPDATE 7, 5:05 p.m.) Discussions for the PLDT group's acquisition of a controlling interest in GMA Network Inc. have fallen through, the country's biggest telecom company said on Thursday.
In a disclosure to the Philippine Stock Exchange, Philippine Long Distance Telephone Co. said talks between its unit, MediaQuest Holdings Inc., and the major shareholders of GMA7 were terminated.
"The parties have been unable to arrive at mutually acceptable terms despite the continual discussions and efforts exerted in good faith," PLDT said.
Shares of GMA7 dropped 9.31 percent to P8.80 apiece at the opening of trade, while those of PLDT slid to P2,742 from Wednesday's close of P2,744.
Analysts blamed the breakdown in talks between PLDT and GMA7 on the issue of price. GMA7 chairman Felipe Gozon at one time said a P200 billion price tag was irresistable, but PLDT chairman Manuel V. Pangilinan had balked at this figure, quoting only a fourth of that amount, which still was double the broadcast company's market value at the time.
Astro del Castillo, managing director at First Grade Finance, said pricing was "one of the major issues," adding that any legal or ownership issue "should pose no difficulty."
Justino Calaycay of Accord Capital Equities Corp. said the price "could be one of the factors," but didn't rule out "the issue of control."
On the sidelines of the anniversary celebration of the Civil Aeronautics Board, Gozon however said issues other than the price loomed larger during the negotiations with the PLDT group.
"It's not about the price," he said, adding that a confidentiality agreement with the PLDT group barred him from elaborating on the "sticking points" that caused the negotiations to break down.
Asked if GMA7 was leaving the door open for another attempt by the PLDT group to invest in the broadcast company, Gozon said, "If they come back, they will have to make another offer."
As for third parties interested in acquiring GMA7, Gozon had this to say: "There is no offer yet from San Miguel. If there's an offer, we will consider it."
Also at the CAB event, San Miguel Corp. chairman Ramon S. Ang however said he was keen on another TV network.
In a statement issued subsequent to the PSE disclosure, Manuel V. Pangilinan, PLDT chairman, said: “The termination of the GMA acquisition initiative is not expected to adversely impact the PLDT Group’s strategy of evolving from a traditional telecommunications company into a multimedia service company."
“The PLDT Group continues to believe that owning, producing and providing content across multiple platforms is an important component of its blueprint for growth and as such, intends to pursue its media strategy by building on Mediaquest’s current investments in TV 5, the country's third largest free-to-air television network by audience share, and Cignal TV, the leading provider of direct-to-home satellite television services,” he added.
In late July, Gozon said the PLDT group's investment in the broadcast network would either push through by the end of the year or be terminated. Two weeks later, he said talks between the two parties were "not moving in the same direction."
Speaking during the 6th Internet and Mobile Marketing Association of the Philippines Summit a week later, Pangilinan said negotiations with GMA7's majority owners, which apart from Gozon includes the Duavits and Jimenezes, were like an "on again, off again" courtship.
Pangilinan also chairs TV5, of which InterAksyon.com is the online news portal.
With a report from Krista Angela M. Montealegre
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