Smart, however, remains hopeful that GMA will still change its mind after it reviews an offer that the former will be making very soon, STAR sources said.
Following a meeting between the Gozons and Duavits who own 65 percent of GMA, company corporate communications head Butch Raquel said: "GMA Network is not for sale. In fact, the company plans to go public when it feels that the market is favorable." The Jimenez group owns 35 percent of the company.
GMA said that neither PLDT nor Smart is qualified to buy any broadcasting company, since both companies are not 100 percent Filipino-owned.
But according to a report from The STAR last week, Smart officials claim that under the "control test" for determining the nationality of corporations, Smart is considered 100 percent Filipino-owned and shall therefore have no problems in acquiring a majority stake in the broadcast company.
GMA assistant vice-president for legal affairs Dick Perez, reacting to the newspaper statement, said that the "control test" does not apply to the broadcast industry.
"Though the ‘control test’ may have been applied by the SEC in determining the nationality of corporations, it cannot apply to industries that require 100 percent Filipino ownership. One such industry is mass media which includes broadcast. The Constitution expressly provides that mass media must be wholly owned and managed by Filipino citizens," he added.
Smart officials, on the other hand, noted that there is still no decision by Philippine courts or no local jurisprudence that has decided that the control test does not indeed apply to the mass media.
More than two years after it pulled out of an agreement to buy a majority stake in GMA Broadcasting Corp., telecommunications giant Philippine Long Distance Telephone Co. (PLDT) has renewed its interest in the country’s second biggest television company and is planning to make a new offer, this time through wireless subsidiary Smart Communications.
The STAR earlier reported that Smart will be making an offer to acquire a majority stake in GMA 7 that will be very hard for the owners to refuse and wants to close a deal before May this year.
It will be recalled that on Feb. 8, 2001, PLDT signed an agreement with to acquire a 66-percent stake in the broadcasting network for P8.5 billion. Later in the year, however, PLDT had to withdraw from the memorandum of understanding due to concerns raised by its creditors over some $1.3 billion in maturing loans. Despite due diligence investigations, PLDT and GMA did not arrive at a purchase agreement.