PLDT completes 98% acquisition of Digitel

MANILA, Philippines - Telecommunications leader Philippine Long Distance Telephone Co. (PLDT) now owns 98 percent of the enlarged capital base of Digital Telecommunications Phils. Inc. (Digitel) following the successful conduct of a tender offer among the minority shareholders of the latter.

Some 2.89 billion shares were tendered by Digitel minority shareholders, representing approximately 94 percent of the shares held by the public. The minority shareholders were given the option of receiving the payment in cash at P1.6033 per share, or in the form of PLDT common shares valued at P2,500 per share or one PLDT share for every 1,559.28 Digitel shares, except for shareholders residing outside the Philippines who will only be paid in cash.

Of the total shares tendered, 13 percent or 374 million Digitel shares are to be paid in cash, and 87 percent or 2,514 million shares are to be paid in PLDT common shares. This translates to the payment by PLDT of about P600 million in cash and issuance of approximately 1.6 million PLDT common shares. The tendered shares are to be crossed at the Philippine Stock Exchange (PSE) on Jan. 24, 2012, with settlement of both cash and share transactions on Jan. 27, 2012.

Following the completion of the tender offer and with the previously disclosed partial conversion of the convertible bonds held by PLDT into four billion Digitel shares, PLDT will own 10.165 billion common shares or 98 percent of the enlarged capital base of Digitel.

PLDT undertook a tender offer to Digitel minority shareholders following its acquisition of 51.55 percent of Digitel from Gokongwei holding company JG Summit Holdings Inc. (JGS), Express Holdings Inc. and other individuals and corporate stockholders of Digitel.

The tender offer period commenced on Dec. 7, 2011 and was originally scheduled to end on Jan. 9, 2012. However, to give the Digitel minority shareholders more time to participate in the tender offer, PLDT filed for and was granted an extension of the tender offer period to Jan. 16, 2012.

With Digitel’s public ownership falling below the minimum 10 percent required by the PSE, PLDT said it will file a petition for the voluntary delisting of Digitel.

Digitel is the 100-percent owner of Digitel Mobile Philippines, Inc., which owns the whole brand Sun Cellular, the pioneer in unlimited call and text messaging services.

Another conditionality imposed is that PLDT will divest itself of subsidiary Connectivity Unlimited Resources Enterprise (CURE), with the latter’s franchise, telecommunications frequencies, and related permits to be sold via an NTC-supervised competitive public bidding among duly enfranchised and qualified public telecommunication entities.

Under the plan, CURE will sell its Red Mobile business to PLDT wholly-owned mobile subsidiary Smart Communications consisting of its subscriber base, brand and fixed assets. Smart will then sell all of its rights and interests in CURE whose remaining assets will consist of its congressional franchise, the affected frequency and related permits.

PLDT will have nine months to effect the orderly migration of CURE’s customers as well as an orderly transfer or CURE’s assets to Smart with the least disruption and degradation of service to CURE’s existing customers. The transition period will be reckoned from the date of promulgation of the decision.