PLDT buys 35% of Meralco unit
Telco giant PLDT Inc. is showing no signs of slowing down its broadband expansion, this time investing P2.12 billion to acquire more than a third of shares in a sister subsidiary.
PLDT informed yesterday the Philippine Stock Exchange that it is following up its acquisition of Sky Cable Corp. with an investment in Radius Telecoms Inc., controlled by Manila Electric Co. (Meralco).
Under this, PLDT will secure 2.49 million shares of common stock, representing 34.9 percent of equity in Radius, with each share priced at P849.28.
PLDT will invest P2.12 billion to complete the transaction. PLDT deemed it necessary to purchase shares in Radius to cement industry leadership and expand market share.
Recently, the telco led by Manuel V. Pangilinan has secured anti-trust approval to proceed with its P6.75 billion buyout of Sky Cable. In turn, Sky Cable will shut its pay TV services on Feb 26, and from there will operate as a dedicated broadband provider under PLDT.
Similar to the Sky Cable transaction, PLDT has to complete multiple procedures before it makes the investment in Radius.
These processes include completing the due diligence review, obtaining corporate and regulatory approvals and reaching a definitive agreement with Radius.
Radius manages a network of facilities running on pure fiber, providing connectivity services to at least 150 enterprise buildings and more than 200 residential units.
Both PLDT and Radius expect the transaction to result in cost efficiencies, as they will be able to use each other’s infrastructure base in key areas. They also look to explore operational synergies to improve connectivity quality for customers of both PLDT and Radius.
Radius holds a legislative franchise to operate and maintain telco assets for commercial services. Radius is 100 percent owned by Paragon Vertical Corp., a unit of e-Meralco Ventures, which is a subsidiary of Meralco and is also led by Pangilinan.
PLDT is the largest telco player in the Philippines, holding close to half of the broadband market, especially after merging Sky Cable in its business.