Jimenez family wants GMA Network IPO to push through

The Jimenez family, which owns 35 percent of GMA Network, is supporting the initial public offering (IPO) of the broadcasting company and is hopeful that the owners will soon come to an agreement as to the proposed terms of the sale of between 20 and 30 percent of total outstanding stocks to the public.

The company revealed the other day that it has indefinitely postponed its planned IPO due to disagreement between the majority and minority shareholders as to the issue of the timing, valuation, and how much shares to sell.

GMA 7, one of the big-ticket offerings being highly awaited by the stock market this year, was intending to raise about P9 billion for the company and its three major shareholders. The amount was based on a market value of about P27 billion to P30 billion. ATR Kim Eng Securities and Deutsche Bank were tapped as financial advisers for the IPO.

On one side are the families of Gilberto Duavit and GMA chairman and CEO Felipe Gozon who control 65 percent of the company (the Duavits own 35 percent and the Gozons, 30-percent) and the family of long-time GMA chairman Menardo Jimenez (now retired) which accounts for the balance.

The Jimenezes reportedly refused to sign the shareholders‚ agreement that will pave the way for the IPO due to a provision that control of the company will remain with the existing owners even after the public offering. The network’s majority shareholders were worried about losing control of GMA to another party that might join forces with the minority shareholder, the sources said.

There have been speculations that the Gozons and Duavits are preventing a possibility that the 30 percent shares that will be offered during the IPO will go to one group (possibly the Philippine Long Distance Telephone Co. which has long been interested in acquiring GMA 7 and almost did until the whole deal was aborted) that will partner with the Jimenez bloc and then wrest control of the company from the Gozon-Duavit bloc.

GMA Network board member Joel Jimenez said told The STAR that as in any company that is offering its shares to the public for the first time, problems and disagreements happen. "It’s just a little hump and we are hopeful that we can sign the shareholders agreement soon to pave the way for the IPO," he said.

Jimenez disclosed that the other owners have some demands such as provisions for buying and selling shares after the IPO which their family has questioned.

The majority shareholders have revealed that they want the existing owners to retain control of the company even after the IPO to which the Jimenezes would not agree, according to the former.

In response, Jimenez said that their family is not against the IPO. "As to the valuation, the timing of the offering, all these are indicative. We do not want to be tied to an agreement until we are sure of everything. This is a major step for all of us," he stressed.

As to the prohibition against buying and selling of shares being asked by the majority shareholders, he revealed that the Securities and Exchange Commission already has rules on this matter and should be the one that must be followed.

Jimenez acknowledged the great job that his uncle, GMA chairman and chief executive officer Felipe Gozon, has done to increase the value of the company. "We are appreciative of all his efforts to grow the company to what it is today. It is not an easy job. Contrary to reports that my father (Menardo Jimenez) wants to get back control of the company, these are not true. He is perfectly happy and more relaxed with his life now. He is busy with his other concerns, including an abaca company in partnership with the Japanese which he is doubling in capacity," he said.

The younger Jimenez said that the main reason why GMA 7 is going public is to give the latter a chance to be part of the company. "We would prefer a more dispersed ownership of the shares that will be sold during the IPO so that GMA 7 will be an actively traded stock," he pointed out.

He added that a company during its lifetime goes through different phases. "It was my father who nurtured GMA 7 during its initial stages coming from black and white television. Chairman Gozon is now whipping up the company in its growth stage and is doing a great job at it," he emphasized.