PCC clears sale of ABS-CBN’s Sky Cable to PLDT
THE Philippine Competition Commission (PCC) has approved the sale of Sky Cable, a subsidiary of media company ABS-CBN Corp., to telecommunications giant PLDT Inc.
Competition watchdog PCC gave the go-signal for Sky Cable to be sold to Pangilinan-led PLDT, ABS-CBN said in a disclosure to the stock exchange on Monday. Sky Cable provides broadband, enterprise cable broadband, pay television, and cable services.
The Lopez-led media company said the deal involves the sale of 100% of Sky Cable’s total issued and outstanding capital stock to PLDT, “subject to a number of closing conditions.”
“ABS-CBN will disclose material information to update the disclosure made to the exchange on March 16, 2023 once they become available,” it said.
In a separate stock exchange disclosure, PLDT said that the proposed transaction will not be implemented until all closing conditions are fulfilled.
In March of last year, PLDT announced its plan to acquire Sky Cable for P6.75 billion, aiming to expand its coverage and services.
The transaction involves the sale of about 1.38 billion common shares at P4.90 apiece, with the purchase price based on the agreed equity valuation of Sky Cable’s shares as of Dec. 31, 2022.
China Bank Capital Corp. Managing Director Juan Paolo E. Colet welcomed the news, saying it is positive for ABSCBN investors.
“This deal is particularly important to ABS-CBN as the proceeds will be used to reduce the company’s debt load, and the divestment will free up management’s time and resources to focus on content creation and explore new business opportunities,” he said in a Viber message.
He also said the move will not result in competition issues, adding that Sky Cable is not expected to have a material impact on PLDT’s financial performance in the near term.
“The remaining major players in the industry are already highly competitive as it is,” he said.
April Lynn Lee-Tan, chief equity strategist at COL Financial Group, Inc., said in a separate phone message that the acquisition will “expand PLDT’s market share.”
China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said the acquisition will provide growth opportunities for PLDT’s home business.
“PLDT will also have the opportunity to migrate Sky Cable’s broadband customers into their higher value products — which should help prop up top line growth prospects,” he said in an e-mail interview.
“We note such inorganic growth opportunities are a welcome development for telcos, especially as the postpaid broadband market is believed to be nearing saturation and the overall legacy telco sector is already considered a mature industry (i.e., limited growth prospects),” he added.
On Monday, PLDT shares rose by P26 or 2.05% to P1,296 apiece while ABS-CBN stocks fell by one centavo or 0.2% to P4.99 each.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.