The Coupling and Uncoupling History of PLDT and GMA
In case you missed it, the Philippines’ largest telecommunications firm PLDT Inc has. partnered with one of the country’s biggest broadcasting companies, GMA Network Inc., to help it with its digital transformation.
“The companies entered into a technology, content, and distribution agreement that will involve the launch of game-changing innovations that will power the media giant’s digital transformation,” GMA said in a disclosure dated January 9, 2018.
The partnership is seen to improve the network's quality of content, as well as help it reach more audiences through digital means.
This isn't the first time the two companies have worked together. In fact, PLDT has long wanted to take over the broadcasting station. Through its subsidiary MediaQuest Holdings Inc., PLDT has attempted and failed to acquire GMA Network four times since 2001.
The telco giant first expressed interest in acquiring the broadcasting company in 2001, during which they initially agreed on a purchase price of P8.5 billion for a 66.67-percent stake.
The agreement fell through later that year due to “concerns raised by [PLDT’s] creditors over some $1.3 billion in loans that will mature in 2002 to 2004,” a 2004 report from The Philippine Star said.
The second failed attempt happened in 2004, when PLDT, through its wireless subsidiary Smart Communications, Inc., announced that it was planning to make an offer to acquire a controlling stake in GMA Network.
The announcement raised concerns from the National Telecommunications Commission, saying that Smart Communications cannot legally acquire the broadcasting network because the Constitution requires 100-percent Filipino ownership for mass media companies. In the end, the whole thing just fizzled out.
Seven years later PLDT once more initiated the deal, again led by CEO Manny V. Pangilinan, offering to purchase a 79-percent stake. By then it already owned TV5, the third biggest broadcasting network in the country.
That year, GMA Network CEO Felipe Gozon even told reporters that the deal should take place within the year, or it won't ever happen at all. “I don’t think it will go beyond this year. It will either terminate or go through this year. That is too long to be talking already,” the BusinessMirror quoted him in a July 2012 article.
But three months after, PLDT disclosed with the Philippine Stock Exchange (PSE) that MediaQuest Holdings Inc. and the major shareholders of GMA Network have agreed to terminate buy-in discussions.
“The parties have been unable to arrive at mutually acceptable terms despite the continual discussions and efforts exerted in good faith,” PLDT wrote. GMA Network took the blow harder this time.
CNBC International noted how share prices of GMA Network’s stocks fell to six-month lows following the announcement. “GMA lost as much as 9.5 percent in early trade...while its Philippine Deposit Receipts (PDR) fell nearly 11 percent after it said shortly before the market opened that the talks failed.” Meanwhile, PLDT’s shares gained “nearly one percent.”
Reports about the two companies’ negotiations started circulating again roughly 13 months later, in 2012. This time PLDT offered to acquire a 34-percent stake. But that didn’t last long either, as PLDT confirmed on March 2014 that their discussions with GMA Network have collapsed yet again.
“I am getting tired," Rappler quoted Pangilinan in 2014, revealing that they received no feedback from the other party. "There's no news. We don’t know what’s going on."
Fast forward to 2017, Pangilinan said they are still open to discussions with GMA Network. But the two companies have not yet revived any buy-in talks since then.
As of January 16, PLDT is the 17th largest listed firm in the country with a market capitalization of P262.5 billion. GMA Network, on the other hand, is the 80th biggest and is worth P19.6 billion.
Meanwhile, PLDT’s subsidiary MediaQuest currently proivides radio and television broadcasting services through Nation Broadcasting Corp., MTV Philippines, Philippine Home Cable Holdings Inc., and Unilink Communications Corporation. It also has sizable interests in broadsheet newspapers The Philippine Star and BusinessWorld.