First Pacific dismisses PLDT sale as rumour

Hong Kong-based investment and management company First Pacific [0142.HK] has reacted quickly to scotch a rumour that it is looking to sell its 24.2% stake in Filipino incumbent Philippine Long Distance Telephone (PLDT) to Malaysian telecoms heavyweight Telekom Malaysia. According to the Philippine Daily Inquirer, Telekom Malaysia and the Salim family who control First Pacific are in an ‘advanced state of discussion’, although the newspaper failed to disclose its source. Nonetheless, the article helped to push PLDT shares down by 1.7% to PHP282.5 per share today, as investor concerns over the ownership and management of the Philippines’ largest phone company once again came to the fore. In 2002 PLDT saw its share price cut in half after First Pacific revealed plans to offload its stake in the telco to a joint venture comprising itself and the Gokongwei family, with the latter taking the controlling stake. PLDT’s management staunchly resisted the move, claiming that it would place the company in the hands of a rival firm as the Gokongweis control Summit Holdings which has majority ownership of domestic fixed line competitor Digitel; under the terms of the deal the Gokongwei/First Pacific joint venture would control both PLDT and Digitel. The plan was finally scrapped in October when stalling PLDT president Manuel Pangilinan offered USD617 million for the stake and most of First Pacific’s interest in one of Manila’s biggest property projects. However, by that date the four months of uncertainty over PLDT’s ownership saw much damage done to its stock value. In a bid to avoid a similar fate in the wake of the latest revelation from the Philippine Daily Inquirer, First Pacific spokesman Rebecca Brown has been quick to dismiss the newspaper report as mere ‘rumour’ adding that there is ‘no truth in it’. Telekom Malaysia chairman Muhammad Radzi Mansor too has also denied the report, while a spokesman for PLDT declined to comment.