First Pac, NTT to match P25.2-B bid for PLDT shares

The consortium of Hong Kong-based First Pacific Co. and Japan’s NTT Group intends to merely match the P25.2-billion bid put up by a Singaporean group for the 46-percent stake of the Philippine government in Philippine Telecommunications Investment Corp. (PTIC), which in turn owns substantial shares in Philippine Long Distance Telephone Co. (PLDT).

The highest bid for these shares was at P25.2 billion, posted by Singaporean hedge fund Parallax Venture Fund XXVII. "Mr. Pangilinan’s group will match this, and perhaps add some more, being a patriot as he is, for the benefit of our people," Presidential Commission on Good Government (PCGG) Commissioner Ricardo Abcede said yesterday.

But First Pacific managing director Manuel Pangilinan, in an interview, said First Pacific will simply match the bid, "no more, no less."

"We have to exactly match. It cannot be more, although we want to pay more," Pangilinan, who is also the chairman of PLDT, emphasized.

He said they intend to match the offer as soon as practicable. "We still have to receive the notice to match from the Department of Finance. Our response will take a day or two so we hope to close the transaction as soon as practicable," he pointed out.

First Pacific, which owns the remaining 54 percent of PTIC, has a right of first refusal over the government shares in PTIC. "We can only match. We are not allowed to bid higher or lower," Pangilinan said. Government’s 46 percent stake in PTIC translates to a 6.4 percent ownership in PLDT.

First Pacific and NTT have partnered to acquire the additional 6.4 percent stake (or 3.2 percent each) in PLDT valued at an estimated P25 billion. This would raise their combined shareholdings to 44 percent. Pangilinan said that as part of one consortium in PLDT, First Pacific decided to invite NTT to participate in the opportunity to acquire additional shares in PLDT.

The acquisition will be done when the combined strength of PLDT’s two largest stakeholders participate in the public auction to be conducted by the Philippine government of its stake in PTIC which government acquired after the Supreme Court ordered the reconveyance of shares in PTIC owned by the family of businessman Antonio ‘Tonyboy’ Cojuangco which were condemned as "ill-gotten."

Prime Holdings, the corporate vehicle used by the Cojuangco family in owning 46 percent of PTIC, was a dummy for the late President Marcos, according to the Supreme Court.

The said PTIC shares held by Prime Holdings and now owned by government was turned over yesterday morning, as mandated by the Sandiganbayan, by PTIC to the government through the PCGG.

Earlier, the First Pacific top official told the STAR that it makes sense for them to acquire the remaining stake in PTIC in order to consolidate First Pacific’s ownership in PTIC.

But according to NTT DoCoMo, it is still planning to acquire additional shares in PLDT. Under an agreement with First Pacific, the NTT Group can own not more than 20 percent of PLDT to ensure First Pacific’s control of PLDT.

The 20-percent ceiling set for the NTT Group was included in the cooperation agreement signed by PLDT, DoCoMo, NTT Com and First Pacific last Jan. 31, the same day DoCoMo agreed to buy 12.63 million shares of PLDT from NTT Com for $440 million.

First Pacific is proposing to acquire an additional interest in PLDT representing approximately 3.2 percent of PLDT’s issued share capital. Following the proposed acquisition, First Pacific will have an attributable economic interest of approximately 27.5 percent of PLDT’s issued common share capital.

NTT DoCoMo of Japan, which is an existing strategic investor in PLDT owning a 6.7 percent stake, will also acquire shares representing approximately 3.2 percent of PLDT in the same transaction. NTT’s sister company NTT Communications currently owns another 6.7 percent stake in PLDT.

Two bids were received by the Philippine government pursuant to the auction process, the highest of which is equivalent to approximately P2,100 ($42.52) per share of PLDT held by PTIC. First Pacific in a statement said this compares to the closing price of a PLDT share on the Philippine Stock Exchange of P2,440 ($49.40) on Dec. 15, 2006.

First Pacific has reached agreement in principle with NTT DoCoMo for the latter to acquire half of the available 6.4 percent stake in PLDT and for First Pacific to acquire the other half. NTT

DoCoMo is a strategic investor in PLDT, currently holding together with NTT Communications Corp. approximately 13.4 percent of PLDT’s issued common share capital. NTT DoCoMo and First Pacific will each provide 50 perent of the aggregate purchase price for the approximately 6.4 percent interest in PLDT to be acquired by them in aggregate.

The proposed acquisition however can only proceed following the issue by government of its formal notice pursuant to the right to match. First Pacific anticipates this formal notice will be issued shortly and that the proposed acquisition will be completed within 30 days thereafter.

Meanwhile, in a separate statement, NTT DoCoMo said it plans to acquire approximately six million shares of PLDT (3.2 percent of total issued and outstanding shares), which is expected to be equivalent to approximately P13 billion or 30 billion Japanese yen from an affiliate of First Pacific Company Limited (FPC), PLDT’s largest shareholder.

DoCoMo expects to finalize the specific terms of the transaction after discussions with FPC.

Japan’s biggest wireless company, which acquired 12.63 million PLDT shares (around 6.7 percent of total issued and outstanding shares) from sister company and fixed line giant NTT Communications Corp. in March of this year, will have a total of 19 million shares (9.9 percent) of total issued and outstanding shares) after this latest acquisition.

DoCoMo said its additional investment will further strengthen its relationship with PLDT and Smart Communications, PLDT’s wholly owned mobile subsidiary.

Smart, with DoCoMo’s backing, intends to launch the i-mode service and expand W-CDMA services in the Philippines and promote international roaming services between Japan and the Philippines .

Smart and DoCoMo will also collaborate as members of the Conexus Mobile Alliance of eight Asian operators which are cooperating in international roaming and corporate mobile services.