PHILIPPINE Long Distance Telephone Co. (PLDT), controlled by Hong Kong-based conglomerate First Pacific Co. Ltd., is walking away from two potentially promising acquisitions -- Bayan Telecommunications Inc. and Philippine Multi-Media System Inc., operator of Dream Satellite TV -- in view of irreconcilable pricing differences.
This developed after First Pacific failed in its bid last week to acquire food and juice firm Del Monte Pacific Co. Ltd., which went to a newly formed joint venture of beverage and food conglomerate San Miguel Corp. and condiments magnate Jose Campos Jr.
PLDT's discussions with the Lopez group's BayanTel and former PLDT chairman Antonio Cojuangco's Dream Satellite TV had gone on for months this year.
PLDT president Napoleon Nazareno confirmed that the company had decided not to pursue talks with the Lopez family on the purchase of Bayantel, a niche fixed-line player saddled with debts.
"We had decided to pull out from the talks with BayanTel because of pricing differences," he said.
BayanTel's asking price was quite a sum, considering its financial status, Nazareno said.
Other Inquirer sources said that PLDT's board of directors also agreed at a recent meeting not to chase after Dream Satellite TV.
Owning Dream Satellite would have been the key for PLDT to finally pursue its tie-up with US direct-to-home provider Echostar. Now, PLDT has to negotiate with other groups owning a franchise to operate a direct-to-home satellite.
Nazareno declined to comment on pending discussions over Dream Satellite. He said that what people could be talking about could just be "posturings" among those involved.
A source said Cojuangco was upset with PLDT's decision, after negotiating with officials of his former company for months.
In the third week of September, PLDT and Dream Satellite TV came close to signing a memorandum of agreement that would have paved the way for a transfer of ownership.
The sources said Cojuangco's group changed its mind on accepting PLDT's offer of $22 million for Dream Satellite TV and soon afterwards opened a new round of negotiations.
As weeks passed, the possibility of PLDT and Dream Satellite coming to terms on valuation dimmed, the sources said.
Last Friday, Dream Satellite TV and ABS-CBN Broadcasting Corp. signed an exclusive deal that gave Dream Satellite TV access to ABS-CBN programs and let the Lopez group's cable television company SkyCable use Cojuangco's setup boxes and other satellite technologies to make SkyCable less vulnerable to signal theft.From http://www.manilastandardtoday.com/?...s06_dec15_2005
Philippine Multi-Media System Inc., operator of Dream Satellite TV, formally dropped the bid of Philippine Long Distance Telephone Co. to acquire the direct-to-home satellite pay TV firm. A source privy to the talks said Dream Satellite owner Antonio “Tonyboy” O. Cojuangco simply did not return to the negotiating table after PLDT chairman Manuel “Manny” V. Pangilinan, or MVP, and Metro Pacific Corp. president Jose Maria Lim stuck to their low bid price of $22 million.
Tonyboy, according to the source, had made known his intentions at the outset of the talks that he would only agree to sell Dream Satellite for $50 million, take it or leave it. Tonyboy’s price tag covers the cost of owning a cable TV franchise (estimated at P1 billion or roughly $20 million today), his investment cost and a premium for offering wireless and more efficient cable TV technology.
The failure to clinch the Dream Satellite deal is the latest setback suffered by the Hong Kong-based First Pacific Group, which owns a quarter of PLDT and controls Metro Pacific, after losing a bid to acquire Del Monte Pacific earlier. The botched deal has also prevented PLDT from maximizing convergence opportunities available in the market.
Controlling Dream Satellite was key to PLDT’s plan to forge a tie-up with US direct-to-home provider Echostar. PLDT, as a result, will now have to start talks with other groups that own a franchise to run a direct-to-home satellite service or seek its own license by asking Congress.
The failed transaction between Dream Satellite and PLDT became evident two weeks ago when Tonyboy’s company signed an exclusive partnership with Beyond Cable Inc. The deal allows Lopez-owned Beyond Cable to tap the infrastructure of Dream Satellite in a bid to gain access to the C, D and E markets, particularly in the countryside. It also gives Dream Satellite access to ABS-CBN programs and allows Beyond Cable to use the former’s setup boxes and satellite technology to eliminate signal theft.
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