PLDT to buy Sky Cable for P6.75B
For the third time, this could be a success for PLDT Inc., which has sought to take over ABS-CBN Corp’s cable TV and broadband business. after announcing on Thursday a 6.75 billion peso deal with Sky Cable Corp.
In the disclosures, both PLDT and ABS-CBN said the telecommunications company, led by Pangilinan, will acquire 100 percent of Sky Cable’s outstanding capital from broadcast network Lopez Inc. and Sky Vision Corp.
The deal is still subject to certain conditions, including obtaining all government approvals, Sky Cable moving away from the pay-TV and cable business and focusing solely on broadband, shareholder agreement, and that “no events should occur that prevent would be a party to the performance of its obligations or proposed transactions.
PLDT Chairman Manuel Pangilinan had previously offered to buy Sky Cable from ABS-CBN in 2020, but withdrew the offer due to monopoly issues. One of PLDT’s subsidiaries is Cignal TV Inc., which also provides cable TV services.
Cignal then offered to buy a 38.9% stake in Sky Cable for 2.86 billion pesos last year in a deal between ABS-CBN and PLDT that would see both companies take stakes in each other. The agreement, however, was canceled after objections from regulators and lawmakers.
ABS-CBN, which lost its franchise in 2020 after Congress refused to renew the license, is now focused on creating content and serving former competitors like GMA-7 and Pangilan TV 5.
In its disclosure, the firm said that the sale of Sky Cable “was a strategic decision stemming, among other things, from Sky Cable’s significant capital expenditure to maintain its competitive position.”
“Proceeds from the sale of ABS-CBN shares and the repayment of Sky Vision’s obligations to ABS-CBN will be used by ABS-CBN to repay and fund its pension obligations,” the company added.
“The sale of the company’s stake in Sky will also allow ABS-CBN to focus its resources on content creation.”
PLDT, for its part, said that “the proposed deal is in line with PLDT’s mission to bridge the digital divide by expanding broadband connectivity and supports the government’s drive to expand the nation’s digital infrastructure.”
In addition, “it is expected to benefit existing broadband subscribers of both PLDT and Sky by strengthening and expanding the reach of their offerings and services, especially in remote areas, as well as improving the overall customer experience by pooling expertise, resources and capabilities. PLDT and Sky. .”
Details on how the cable television business will wind down have not been released. ABS-CBN said the service will continue until regulatory approvals are obtained.
“Once approved, Sky Cable is committed to working with all of its cable subscribers to ensure they transition to their preferred service,” the company added.
ABS-CBN will receive about 4 billion pesos for its 58.7 percent stake in Sky Cable. He will receive 94 percent of this amount after the closing conditions are met, and the rest will be paid after the submission of certificates of registration and tax clearance.
The total purchase price is said to have been based on an agreed implied valuation of equity net of registered accounts payable and contingent liabilities of Sky as at 12 December. December 31, 2022 based on Sky’s latest audited financial statements and PLDT due diligence.
PLDT’s share price fell 10 pesos, or 0.76 percent, to 1,300 pesos, while ABS-CBN shares lost 0.68 percent, or 5 cents, to 7.26 pesos as the Philippine Stock Exchange’s benchmark index fell by 0.95 percent.