Telco buyout deal boosts share price

MANILA, Philippines - Share prices rose yesterday, buoyed by a telecommunication asset buyout deal involving index stocks Philippine Long Distance Telephone Co. (PLDT), Globe and San Miguel Corp. (SMC).

The benchmark Philippine Stock Exchange index (PSEi) gained 52.66 points, or 0.71 percent, to close at 7,464.34, while the broader All Shares index finished ahead by 24.62 points, or 0.55 percent, to settle at 4,459.81 points.

PLDT closed 9.13 percent higher at 1,901. Globe was also up 5.8 percent, while SMC gained 5.80 percent.

Most of the counters closed in negative territory except for the holding firms and services index, which gained 0.40 percent and 4.61 percent, respectively.

In separate disclosures yesterday, PLDT and Globe said they would acquire the telco subsidiaries of SMC that include a prized 700-megahertz frequency. The transaction is valued at P69.1 billion.

Under the arrangement, PDLT and Globe will each acquire 50 percent of the telecommunications assets of SMC.

The move is seen as a big boost to the two listed telcos and cements their existing duopoly.

“Concerns over competition eases in the short term through risks still remain. We believe the sale of SMC’s assets has eased concerns over competition in the short term,” said Charles Ang, analyst at COL Financial.

Analysts said the upbeat mood in the region also boosted sentiment.