PLDT-Digitel takeover now delayed to end-July

30 Jun 2011

Philippine Long Distance Telephone Company (PLDT) may now have to wait until end-July to complete its planned acquisition of a majority stake in fellow operator Digital Telecommunications Philippines Inc (Digitel). In separate filings submitted today, both companies confirmed that they had agreed to postpone the closure of the deal by a month, pending approval from the regulator, the National Telecommunications Commission (NTC). PLDT is looking to purchase a 51.55% equity stake in Digitel, following which it will make a tender offer to minority shareholders, raising the total value of the deal to approximately PHP74 billion (USD1.71 billion). The two sides were hoping to conclude the transaction on 30 June but have so far failed to secure the necessary regulatory approval. The tie-up has been approved by shareholders involved, and by the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange. However, the NTC must give the thumbs up before the takeover takes place and it is due to meet in July to hear complaints raised by a number of opponents to the plan. One such complainant, Globe Telecom, is opposed to the deal on the grounds that it sees it as anti-competitive; the enlarged entity would effectively control a roughly 70% share of the domestic mobile market.

Philippines, PLDT Inc. (incl. Smart Communications and Sun Cellular)