The Market Monitor Minding the Nation's Business
By Riza Lozada
The board of San Miguel Corp. (SMC) unit Vega Telecom Inc. (VTI) approved the conduct of a voluntary tender offer for all the remaining 165.9-million common shares of listed Liberty Telecom Holdings Inc. (LIB) to comply with bourse requirements for the P70 billion sale of VTI to Globe Telecom and the Philippine Long Distance Telecommunications Inc. (PLDT).
The offer will be pursuant to the planned voluntary delisting of Liberty Telecoms Inc. (LIB) common shares from the Philippine Stock Exhchange Inc. (PSE), LIB reported to the bourse.
Under the PSE rules on delisting, VTI, as beneficial owner of 1.127-billion common shares and 5.24-billion preferred shares, representing 97.46 percent of the outstanding capital stock of LIB, is required to conduct a voluntary tender offer to its shareholders.
LIB said the offer price will be based on a valuation report and fairness option to be issued by an independent accredited auditor.
Earlier, Globe informed the Securities Exchange Commission (SEC) of its decision to exercise its rights as the holder of 50 percent of the issued and outstanding capital stock to cause VTI to propose the conduct of a tender offer for LIB shares held by minority shareholders of LIB, and the voluntary delisting of LIB, with the view of completing the entire process within the year.
PLDT also wrote the SEC that, after due evaluation and study of the company’s options and plans, it was amenable to VTI conducting a voluntary tender offer and its exercise of its rights to the extent of 50-percent ownership of VTI.
The process for the voluntary tender offer and delisting is contemplated to commence within the third quarter and to be completed within the year, according to PLDT.
As this developed, the two telecommunications giants recently figured in some controversies involving delivery of services.
Marriage of convenience
PLDT was complained by some customers for offering DSL services with fifty percent discount rates subject to a condition that the availing customers are existing Globe subscribers and will be transferring service to PLDT.
Customers qualify for the 50-percent discount on PLDT DSL once proven that they are existing Globe customers and transferring to PLDT DSL service. Last Friday, PLDT announced on its website that its home and enterprise customers in the vicinity of Quezon and Timog avenues in Quezon City that PLDT voice and data services in that area were unavailable after PLDT fiber optic cables servicing their areas were hit by ongoing underground digging of a Globe contractor.
The deal between PLDT and Globe on its recent acquisition of the 700 MHZ spectrum from SMC has been undergoing scrutiny as the Philippine Competition Commission (PCC) will subject the transaction into a two-year period of review.
PCC Chairman Aresenio M. Balisacan said that period allows the companies that are violating the competition law for them to “unfold and reverse their structures and deals.”
The transition period, nonetheless, “does not affect the Commission’s mandate to implement the law” Balisacan told a recent business gathering.