Philippine Long Distance Telephone Comapny (PLDT) today announced it has struck a deal to buy a majority 51.55% equity stake in the country’s number three operator Digital Telecommunications Philippines Inc (Digitel) in a PHP69.2 billion (USD1.59 billion) share swap. Under the plan PLDT will acquire 3.277 billion common shares currently held by Digitel parent JG Summit Holdings Inc, a convertible bond, as well as PHP34.1 billion worth of Digitel’s debt. In its statement PLDT, the nation’s largest telecoms operator, said the transaction would be finalised through the issuing of ‘one new PLDT share for every PHP2,500 consideration payable for the assets.’ Further, PLDT intends to conduct a tender offer for Digitel’s remaining 48.45% shares, which are held by the public. ‘Assuming full acceptance by the minorities of Digitel, the total transaction consideration would be PHP74.1 billion,’ PLDT added.
As reported in yesterday’s CommsUpdate, shares in Digitel rose by the largest amount in more than six years on the Manila bourse, amid speculation that its parent group was holding talks to sell the venture to PLDT. Digitel’s share price leapt 18% to PHP1.83 per share – the largest single gain since October 2004 – and JG’s own stock climbed 8.2% to PHP24.50, as rumours over a possible deal refused to go away. Trading in shares of Digitel and JG Summit was suspended on Tuesday to address market speculation on the ownership deal.