More top level changes expected at PLDT

More changes are expected to take place in the top management of the Philippine Long Distance Telephone Co. (PLDT) after its top officials, chairman Antonio ‘Tonyboy’ Cojuangco and president and CEO Manuel Pangilinan disclosed plans of vacating their respective posts early next year.

Highly placed sources revealed earlier that Pangilinan will succeed Cojuangco, who is devoting his full attention to his newest gem, Associated Broadcasting Corp. (ABC 5), as chairman.

Sources say that Pangilinan’s performance as the overall head of the PLDT Group impressed First Pacific chairman Anthoni Salim, that Pangilinan was requested to focus more attention to rebuilding the Hong Kong conglomerate.

A few months‚ back, Pangilinan, formerly executive chairman of First Pacific, was named chief operating officer, a position that required more of his time at the head office in Hong Kong. Since he travels twice or even thrice a week abroad, Pangilinan feels it is about time that he chose his successor as PLDT president.

Last Tuesday, Pangilinan announced that he has recommended Smart Communications Inc. president and CEO Napoleon Nazareno as his successor, although this is something that the PLDT board has to approve. First Pacific has a 24.4-percent controlling stake in PLDT. Pangilinan wants Nazareno to stay on as CEO of Smart.

"The advantage of Mr. Nazareno joining PLDT is that he will have a strong grasp of both the wireless and fixed line business," explained PLDT vice-president Menardo Jimenez, Jr. "He would therefore be able to immediately evaluate the strong synergies between both groups and execute them in a manner and speed unique to his concurrent position."

"You can expect the PLDT Group to move even faster with Mr. Nazareno’s entry," Jimenez added.

Since the attempted takeover of the Gokongweis last year, PLDT’s share price has jumped from P250 to a high of P820, and is expected to breach the P1,000-mark in the next 12 months. First Pacific’s share price has likewise increased tremendously since the takeover attempt primarily due to the outstanding performance of the PLDT Group.

Pangilinan has mapped out his strategy for First Pacific which is to expand in the Southeast Asian region using First Pacific’s two core businesses: telecommunications and food as the springboard. First Pacific owns and controls both PLDT and Indofood, the largest food conglomerate in Indonesia and biggest noodle maker in the world.

Sources close to Pangilinan said he has been consistently traveling within the region to evaluate possible business opportunities in food and telecoms. However, Pangilinan said "all talks regarding regional expansion are in their exploratory stage."

He has also said he would like to replicate the success of Smart in other countries. "It would be good if we could have several Smarts earning so much in different parts of the world," he added.

Cojuangco’s decision to focus on building ABC 5 into a strong contender in the television arena is the primary reason he advised the PLDT board in its Nov. 4 meeting that he would like to step down as chairman of the company. Company sources say that Tonyboy was offered the position of honorary chairman for his valuable contribution to the organization, but opted to just be a member of the board. Cojuangco’s group still has a seven-percent stake in PLDT.

"When you examine the movements at the top, not much will really change. But more importantly, corporate stability is maintained. Both Mr. Pangilinan and Mr. Cojuangco will continue to play an active role in charting the direction for PLDT moving forward," Jimenez explained.

Investment analysts have given their stamp of approval on the performance of the company and the upcoming management changes. UBS Equity upgraded its target share price for PLDT from P880 to P1,050. Citigroup likewise raised its target from P770 to P950, while JP Morgan is looking at a share price of P947 for PLDT.

"After the top level management changes are made, you will have Mr. Pangilinan charting growth and expansion of PLDT from the First Pacific level, Mr. Cojuangco contributing to the strategic direction of PLDT at the board level, and Mr. Nazareno steering PLDT and Smart at the operational level. From whatever angle you look at it, the future looks bright for PLDT," Jimenez added.