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Mandatory tender offer set for the rest of Digitel

Posted on December 06, 2011

PHILIPPINE LONG DISTANCE Telephone Co. (PLDT) will conduct a mandatory tender offer for the remaining 48.45% of its newly acquired unit Digital Telecommunications Philippines, Inc. (Digitel).

PLDT, which completed its acquisition of 51.55% of Digitel through a P69.2-billion share-swap deal with JG Summit Holdings, Inc. last Oct. 26, is seeking to purchase a remaining 3.08 billion common shares held by the public or minority shareholders.

“[PLDT] shall purchase the Digitel public shares ... at the price of P1.6033 per share, payable by the issue of new PLDT common shares valued at P2,500 per...,” a tender offer report disclosed by Digitel stated.

The ratio can also be read as one PLDT common share for every 1,559.28 Digitel shares although after taking away customary selling charges it will be one PLDT common share for every 1,567.45 Digitel shares, PLDT said in the report.

“Tendering shareholders may choose to receive the payment for their shares only in PLDT shares ... or cash. No combination of PLDT shares and cash will be paid except only when there is a resulting fractional share,” PLDT said.

The offer period will run from 9:00 a.m. on Dec. 7 to 12 noon on Jan. 9, 2012.

“[PLDT] reserves the right to extend the tender offer with the approval of the Securities and Exchange Commission,” the firm added.

PLDT has previously said that if the offer is fully taken up, the Digitel deal’s value would increase to P74.1 billion. It also said last month that Digitel would be delisted in early 2012.

Digitel profits fell by 98% to P15.68 million as September on the back of landline business losses. This came despite 16% growth in revenues to P14.03 billion.

PLDT reported a 4% drop in profits to P30.62 billion in the same period. The firm has revised its profit guidance for 2011 downward to P39 billion from P40.5 billion.

PLDT shares closed 1.23% or P30 lower at P2,406 per share yesterday, while Digitel ended up 0.63% or P0.01 to P1.59 apiece. JG Summit Holdings closed 0.60% or P0.15 lower at P24.95 per share.

Mediaquest Holdings, Inc., a subsidiary of the Beneficial Trust Fund of PLDT, has a minority stake in BusinessWorld. -- Kathleen A. Martin