First Pacific to match 2 bids for PLDT stake

Hong Kong-based industrial conglomerate First Pacific Co. Ltd. indicated it would match the bids offered by two private equity firms for the government’s six to seven percent stake in telecommunications giant Philippine Long Distance Telephone Co., according to Finance Secretary Margarito Teves.

First Pacific, the single biggest shareholder in PLDT with a 24-percent holding, has 90 days to match the highest bid of P25.2 billion ($509 million) which was offered by Singapore-based private equity group Parallax Venture Fund, topping the P24.9 bid put forward by Pan-Asia Presidio Capital.

"They will exercise, except that we don’t know the exact date. We will discuss it with them (First Pacific)," Teves said.

The government has set a floor price of P24.9 billion for its 46 percent stake in Philippine Telecommunications Investment Corp. (PTIC), which owns six to seven percent interest in PLDT.

Parallax’s offer values PLDT’s stake at P2,026 per share.

According to global investment and advisory firm Citigroup, the move should augur well for First Pacific. "This is an instantly NAV-(net asset value)accretive deal if the group exercises its right given this effectively enables it to acquire additional PLDT shares at a discount to (the) market price," it said.

Citigroup said First Pacific may take on a partner for the purchase. "While we believe the group has the financial capacity to fund the entire purchase, we do not rule out a joint acquisition with a strategic partner."

It would be recalled that the Supreme Court issued a final ruling early this year forfeiting in favor of the government the P54 billion worth of shares of Prime Holdings Inc. in PLDT as it was considered part of the ill-gotten wealth of the late strongman Ferdinand Marcos.

The sale is in line with the government’s policy of exiting businesses which it believes are better run by private firms rather than the government and is intended to help government further cut its debt and put the Philippines on track to achieving its goal of a balanced budget by 2008.

First Pacific, through Metro Pacific Asset Holdings and Larouge BV, owns 54 percent of PTIC.

Other shareholders of PLDT include NTT DoCoMo and NTT Communications, both owned by Japan’s NTT, the world’s largest telecoms group by revenue. They own around 14 percent of PLDT.