Manny Pangilinan offers up to P45 Billion for GMA Network

MANILA, Philippines - Philippine Long Distance Telephone (PLDT) chairman Manuel V. Pangilinan has reportedly offered up to P45 billion for a 100-percent stake in broadcast giant GMA Network Inc., The STAR learned.

Sources told The STAR, however, that the majority owners of GMA are asking for P55 billion.

It was learned that the Jimenez and Duavit families are already amenable to selling their respective 33-percent stake. Atty. Felipe Gozon, chairman and CEO of the broadcasting network who owns the remaining one-third stake, has not yet agreed.

Pangilinan’s group, through PLDT Beneficial Trust Fund subsidiary Mediaquest, owns rival broadcasting company TV5.

The acquisition of GMA Network, sources revealed, augurs well with plans of Hong Kong-based First Pacific Co., which controls PLDT, to have a regional presence in the broadcasting field.

Pangilinan earlier said he is in talks with Anthoni Salim, chairman and controlling shareholder of First Pacific, to acquire Salim’s Indonesia-based TV station.

It was also learned that First Pacific is also eyeing a TV network in Vietnam.

In 2001, PLDT engaged in talks with the owners of GMA but negotiations bogged down over pricing issues as well as the owners’ refusal to part with a majority stake.

“2001, if I recall correctly, was P14 billion (amount being offered for GMA). It’s just that Home Cable came ahead of GMA-7 by a few months. In 2001 and 2002, PLDT was not in good shape. If GMA came in first, I think we would have chosen GMA. But that’s fate,” Pangilinan earlier said.

Pangilinan has also said there have been preliminary talks on GMA though he has offered no specific price.

This time, however, sources disclosed that Pangilinan has already put a price tag on his offer.

GMA’s 2011 profit fell nearly 40 percent year-on-year largely due to cuts in ad spending by big clients and the absence of political advertisements. Revenues fell by 8.5 percent to P13.083 billion in 2011.

“Notwithstanding the absence of P2.054 billion worth of revenue from political advertisements generated in 2010, and the global impact of the financial crisis in Europe and slow economic recovery in the US last year, the company delivered a fairly competitive business performance,” the company said.

Profits dropped 39 percent to P1.715 billion from P2.8 billion in 2010.

Despite the drop in earnings, GMA said it had recorded the biggest market share in advertising revenue among the country’s top media firms.

GMA said its main Channel 7 network raised its ad loading minutes by 2.1 percent even with an increase in advertising rates that took effect in February.

Rival ABS-CBN Corp., meanwhile, appeared to be the hardest hit by the ad spend cutback among local broadcasting companies with a 7.1-percent drop in ad loading minutes during the comparable period, GMA Network said citing its own monitoring.

Channel 7, the company’s top performing unit, posted an eight percent revenue growth from regular advertising compared to 2010.

GMA Radio delivered a 15-percent revenue growth from regular advertising. GMA Regional TV reported a 21 percent hike year-on-year in recurring ad placements.

“This year will be far better than the previous year. There is a clear indication that traditional trade revenues for 2012 will go up,” GMA president and COO Gilberto Duavit said.

He revealed that the first quarter 2012 numbers are not yet final, “but we note that there has been a significant increase in March this year than a year earlier. We estimate a single-digit growth.”

Duavit noted that GMA News TV is gaining “traction” with advertisers, but estimated that the channel incurred between P450 million to P500 million in net loss last year.

“The good part of viability is still contingent at this point. One of the benefits of having a news channel is that it is encouraging and gaining traction on advertising arrangement, which is an improvement from last year. The News TV also derived a new program that landed the network’s third international TV offering,” he said.

Advertising from political aspirants in the 2013 midterm polls are expected to pick up. “Political advocacies will be out this year. Originally, we have anticipated political advocacies to start towards the fourth quarter, but… well, indications are it can be earlier. The sales in the news channel have improved. Well, we are not necessarily saying that we will have a break even but we are far closer this year than last year,” he said.

For his part, GMA executive vice president and CFO Felipe Yalong said they are confident to reach the P2.8 billion net income target for this year, unless other scenarios like the US and the Europe slowdown will impact the Philippines.

“[Our advertisers are usually] multinational companies that follows global-wide mandate,” he pointed out.

[By Mary Ann Ll. Reyes of The Philippine Star]

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