• GMA7: Buy-in or buy-out?

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    Emeterio Sd. Perez

    Emeterio Sd. Perez

    GMA Network Inc., which owns GMA 7, the TV channel, and a number of radio stations nationwide, must be a good buy. Manuel Pangilinan and Ramon Ang are interested to buy a piece of it and would even be satisfied with a minority stake in it.

    Pangilinan, known also as MVP to close associates, heads the PLDT group that owns, among others, the giant electricity retailer Manila Electric Co. Ang, on the other hand, is vice chairman, president and chief operating officer of San Miguel Corp.

    How does the interest of Pangilinan and Ang in GMA Network impress the public?

    The answers may vary. The outsiders, referring to the neutral observers of the goings-on inside the boardrooms of listed but not necessarily public companies, would probably welcome either Pangilinan or Ang as long as he is buying into GMA Network.

    Yes, the public stockholders of GMA Network would perhaps welcome a buy-in but not a buyout because the Gozon-Jimenez-Duavit partnership has been working well for the TV station and DZBB the radio station.

    But a 30-percent stake in GMA7 would not necessarily be a minority ownership. In fact, if you would go by the numbers, a would-be buyer eyeing 30 percent would leave the Gozon-Jimenez-Duavit team combining for 60 percent. The resulting ownership profile of GMA Network would relegate the existing majority stockholders to minority participation, while Ang would end up the single biggest stockholder.

    And it would be worse if the four of them, including the potential buyer, would own more than 90 percent because the result would effectively reduce the public’s ownership below the required minimum 10 percent.

    If Channel 7, or GMA7 or GMA Network, or whatever name you would prefer for the network, were to lose the Gozon-Gimenez-Duavit group, what would happen to it? Will it be as popular as it is today? Will Channel 7 retain its identity among its patrons and followers if its present owners were to sell their holdings?

    To question No. 1, the answer would be GMA7 would change drastically if either by Pangilinan or Ang would buy into it, meaning the acquisition would be taken from the unissued common shares. But if Ang were to buy out the Gozon-Jimenez-Duavit team in his “personal capacity,” his association with SMC, which the Philippine Stock Exchange finally reclassified into a holding company, will remain; Channel 7 would not be associated with his company but with San Miguel.

    Definitely, Ang was not bluffing when he offered to acquire 30 percent of GMA Network via a buy-in, because he knows his numbers. His 30 percent would top the 60-percent holdings of the Gozon-Jimenez-Duavit triumvirate.

    As to whether or not the presence of a new stockholder would affect GMA7’s popularity is up for the public to appreciate. With Ang’s identity as “San Miguel,” GMA might end up being identified as a “subsidiary of SMC” when it is not and would never be. As for Pangilinan, with his being the top honcho of the PLDT Group, Channel 7 could be wrongly perceived as the conglomerate’s broadcast unit when this, as in the case of SMC, would be impossible to happen. Remember the Constitution provides for 100-percent Filipino ownership of any media entity.

    What could be worse than selling out to a potential buyer? With the present partners out, GMA Network would be seeking its new place in the broadcast industry. It would no longer be the Channel 7 that it is today but a corporate broadcast vehicle of outsiders who have the money to control it through a majority presence in the board. When this happens, you could only see a corporate war in the offing.

    Meanwhile, the Gozons, the Jimenezes and the Duavits are the owners to watch while they continue to stick to their control of GMA Network. Of course, it would be a different story if they and the small stockholders would be offered P100 billion for their holdings as Felipe Gozon, the chairman of the board, said so. Maybe he was not joking.

    esdperez@gmail.com

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    2 Comments

    1. It is only Gozons and Duavit that really controls channel 7, I heard that jimenez and Gozons does not see eye to eye when the latter was toppled as the CEO years back jimenez might sell his shares to smc as he is a board director.

    2. ThunderousCloud on

      am just wondering, with all their money, why don’t they just build a network of their own? leave 7 alone!