GMA Network Inc., which is GMA 7 or Channel 7 for short, was the first choice of Manuel V. Pangilinan, the chairman of PLDT group, when a few years ago he made known his interest in buying a TV station using Mediaquest Holdings Inc., the beneficial trust fund of Philippine Long Distance Telephone Co. He failed in his initial bid to acquire Channel 7, because the majority owners of GMA Network were not selling.
“Nobody was selling but some people are buying,” Felipe Gozon, chairman and chief executive officer, told reporters about two years ago.
Even then, Pangilinan has not given up on owning a TV station until he found one for sale. Mediaquest now owns Channel 5, the TV station operated by Associated Broadcasting Corp.
Despite this acquisition of what is more known as TV 5, he has not forgotten GMA 7. Recently, he revived his offer to buy a minority stake in it, which is going against his “when we come in, we come in for control” takeover slogan.
Apparently, Pangilinan’s interest in one of the country’s most profitable broadcast groups—if not the most profitable – has not waned. But this time, he has a formidable competitor in San Miguel Corp. (SMC). Yet, despite the offers from the two conglomerates, Gozon and company, who are GMA 7’s controlling stockholders, are not biting.
“The company would not like to comment to an unnamed source,” Ayahl Ari Augusto Chio, vice president for investor relations and compliance, told the Philippine Stock Exchange in a letter dated December 11, 2013. “However, it would like to say that interest in GMA by potential buyers has always remained.”
Chio wrote the letter of which a copy was furnished the Securities and Exchange Commission to explain to the Philippine Stock Exchange the published news that Pangilinan and GMA 7’s majority stockholders were again negotiating for a buy talk.
There is, of course, nothing wrong for two parties to negotiate on possible acquisitions but only if anything is up for sale. Otherwise, everything in the news would be speculative. GMA Network was right in not commenting on the news regarding talks between Pangilinan and the company’s majority stockholders, because the report was based on sources that it could never verify. Who knows? The sourcing could have been a ploy to trap Gozon and his co-owners into admitting that GMA 7 is finally for sale.
What the news failed to convey to the public is the identity of the buyers. It named them only as Pangilinan and SMC. Nothing has been said about the corporate vehicle, which would have been the more crucial information, that would eventually own the acquisition. In the case of Pangilinan, would it be safe to speculate that he would be using Mediaquest in buying GMA 7? If he succeeds in his latest target, then it would be time for him to fully disclose Mediaquest’s ownership of what would be a media empire with significant interests in three newspapers, two TV channels, and three radio stations.
From Day One that Pangilinan makes a public disclosure of Mediaquest’s various conquests, he would be the headliner of business talks. And who knows, some enterprising blackmailer politicians would be calling on him for favor, if not for a closer scrutiny of PLDT group that began in 1985 with his acquisition of Metro Drug Inc. Probably, no one knew then that Pangilinan would go far in his takeover bids and his acquisitions would grow into a conglomerate that it is today.
As for SMC, the news that it would compete with Pangilinan in buying GMA 7 is incomplete. Everything about its planned venture into media business will not happen. The public investors, who own SMC shares, should not believe the reports that SMC wants GMA 7. They should be told if they do not know yet, that a media entity, be it a TV or radio station, or a newspaper, is exclusive to Filipinos, which means, GMA Network WILL never have a foreigner for stockholder. As a media company, it should be owned 100 percent by Filipinos.
In short, SMC was not even qualified to express any interest in acquiring GMA 7 or offer to buy a minority stake in it, because it has foreigner stockholders. As of April 25, 2013, PCD Nominee Corp. held 116.29 million SMC common shares, or 3.51 percent, and 4.92 million preferred shares for “non-Filipinos. The number of foreign-owned SMC shares even increased to 474.05 million shares, or 13.74 percent, based on ownership report as of September 30, 2013. These shares held by PCD Nominee consisted of 469.39 million common shares, 3.71 million preferred 2-A shares, and 80,960 preferred 2-C shares.
Perhaps, some SMC insiders are using the company as a diversionary tactic to take away the expected public reaction to their personal intentions in a broadcast group that counts among its units Channel 7 and DZBB, and 21 other radio stations.