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SMC’s Ramon Ang acquires 30% of Philippine broadcast network

Publication Date : 25-06-2014


Ramon S. Ang, president of one of the Philippines' biggest conglomerates, has acquired an initial 30-per cent stake in broadcasting giant GMA Network Inc..

Ang, who heads food and beverage firm San Miguel Corp. and flag carrier Philippine Airlines, among others, bought the stake for 15.3 billion pesos (about US$350 million) and this was seen as just the start of his aggressive expansion into the broadcasting industry.

In a text message on Tuesday, Ang—who had long been planning to enter the media business—confirmed to the Inquirer that he had struck a deal to acquire 30 per cent of GMA 7 for 10.60 pesos a share.

The announcement was also disclosed by GMA 7 Tuesday but it noted that the deal was still subject to certain closing terms and conditions, which were still being negotiated. It did not disclose any financial terms.

The move signifies continued investor appetite for television assets, especially major players like GMA 7, which was courted on several occasions by Philippine Long Distance Telephone Co., but talks never resulted in a concrete deal. Television continues to corner most, or about 78 per cent, of the 340 billion pesos that Kantar Media said was spent on advertising in the country last year.

The development also suggested the first steps of succession planning by GMA’s controlling shareholders by taking in Ang, head of one of the country’s biggest conglomerates, SMC, according to Jose Mari Lacson, head of research at stockbrokerage firm Campos Lanuza and Co.

Industry sources said the deal also gave Ang the option to acquire additional shares of GMA 7 and potentially gain a majority stake in the future. They said Ang had made the downpayment for the initial stake in GMA 7 long ago to ensure this buy-in transaction.

Based on a total count of 4.86 billion common shares—including 3.36 billion common shares plus the 1.5 billion convertible preferred shares that have five times more voting rights than common shares—the pricing of 10.60 pesos a share gave GMA 7 a total enterprise value of about 51 billion pesos.

GMA chair and CEO Felipe Gozon said: “What we can confirm right now is that the Jimenez, Gozon and Duavit groups of stockholders have decided to sell a minority stake to Ramon Ang. Details of the transaction will be disclosed once we have finalised everything.”

For this transaction, Ang is investing in GMA 7 in his personal capacity and not involving SMC where he is the single-biggest shareholder.

“It’s just a matter of changing the structure of ownership. I think with this announcement, there will now be four major shareholders that will be in control of the company plus the public,” said GMA 7 chief finance officer Felipe Yalong.

Yalong said he was not aware of the details of the transaction with the controlling shareholders—a triumvirate of three families: Gozon, Duavit and Jimenez.
“We’re excited about it because we’re purely a broadcasting company at the moment,” Yalong said, adding that with Ang’s entry as a fourth shareholder in GMA 7, the
company might finally be able to embark on the “convergence” strategy seen elsewhere in the world.

“It will bring us to next level of competition,” Yalong said.

Ang-led SMC has an equity interest in publicly listed Liberty Telecoms Holdings Inc. as a partner of Quatar Telecom. Outside of its partnership in Q-Tel, SMC also controls Bell Telecommunication Philippines Inc. and Eastern Telecommunications Philippines Inc.
US$1:43.79 pesos



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