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PLDT, Globe consider buyout of Liberty minority shareholders

9 Jun 2016

The Philippines’ de facto mobile market duopoly, Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom, are reportedly studying a possible tender offer for the remaining stake of Liberty Telecoms Holdings Inc (LTHI, trading as Wi-Tribe Telecoms) currently held by the public. As it stands, the Philippine Stock Exchange confirms that around 12.8% of LTHI’s stock, equivalent to 165.88 million shares, is in public hands, meaning the buyout would be worth approximately PHP500 million (USD10.89 million), based on its average share price. The news follows last week’s move by PLDT and Globe to each acquire 50% of San Miguel Corp (SMC’s) telecom assets, held by its Vega Telecom unit, which directly and indirectly owns equity stakes in Bell Telecommunication Philippines, Eastern Telecom Philippines, Express Telecom, Hi-Frequency Telecommunication, Telecommunication Technologies Philippines, Tori Spectrum Telecom and LTHI, among others. The deal is broken down as PHP52.1 billion equity interest and PHP17 billion in debts and splits down as follows: PHP69.1 billion for 100% equity interest in Vega Telecom (PHP52.1 billion equity interest and PHP17 in assumed liabilities), PHP691 million for 100% equity interest in Bow Arken Holdings (PHP576 million equity interest and PHP115 million in assumed liabilities), and PHP206 million for 100% interest in Brightshare Holdings. Malaya Business Insight notes that the transaction will be completed in three stages: the first payment, PHP26.42 billion, was settled last week; the remaining 25% or PHP13.21 billion will be paid on 1 December 2016, and the rest of the PHP13.42 billion will be paid on 30 May 2017.

LTHI booked a net loss of PHP113.96 million in Q1 2016, narrowing a loss of PHP207.15 million in the year-earlier period, as its revenue declined to PHP35.93 billion from PHP77.25 billion.

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