PLDT submits request to SEC to extend Digitel tender period

6 Jan 2012

GMA News reports that Philippine Long Distance Telephone Company (PLDT) is extending a tender offer for the remaining shares in fellow operator Digital Telecommunications Philippines Inc (Digitel), which it acquired a majority stake in last year. PLDT informed the domestic bourse that the national Securities and Exchange Commission (SEC) had approved its bid to extend the tender period to noon, Monday 16 January. The offer, launched on 7 December 2011, was originally slated to close on 9 January.

PLDT is looking to snap up the remaining 3.08 billion shares of the telco it does not already own – offered at PHP1.6033 (USD0.03661) per Digitel share. The shares are equivalent to 48.45% of the issued and outstanding capital stock of the firm, which owns the Sun Cellular mobile brand. It is understood the tender offer concerns Digitel common shares issued upon conversion of Digitel’s convertible bonds due 2013. PLDT completed its acquisition of a 51.55% stake in Digitel from JG Summit Holdings on 26 October, in a share swap deal that saw the latter take a 12% stake in PLDT.

Local press reports claim, however, that a group of Digitel minority shareholders have filed a complaint with the SEC, over the fact that PLDT is offering them less for their shares than it offered to JG Summit Holdings. They are looking for an offer price of PHP21.12 per share – the amount it is assumed it paid for the JG shares – rather than the roughly PHP1.6 per share being offered.

TeleGeography’s GlobalComms Database writes that for the first nine months of 2011, Digitel’s net income reached PHP15.68 million, a 98% fall on the PHP850.38 million profit booked in January-September 2010. The group said that 9M earnings related to its mobile arm narrowed by 23% year-on-year to PHP983.32 million from PHP1.28 billion, on mobile revenues of PHP11.65 billion, up 22.2% year-on-year. Digitel ended September 2011 with 16 million mobile subscribers – including 1.5 million post-paid and 14.5 million pre-paid accounts. However, losses from the group’s fixed line services widened by 99% from PHP551.99 million to PHP1.10 billion over the same period. Meanwhile, nine-month profits from fixed internet increased 6% y-o-y to PHP128.19 million from PHP121.06 million last year. Despite the poor performance, PLDT chairman Manuel V Pangilinan is quoted as saying that he expects Digitel to ‘make a profit’ this year.

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