GMA7 acquisition: Manny Pangilinan vs. Ramon Ang — again?

James Ryan Jonas

Is this another case of “What Manny Pangilinan wants, Ramon Ang will also try to get”?

This question emerges as reports regarding purported interest by Ramon Ang, president of conglomerate San Miguel Corporation (SMC), to acquire a 30% equity stake in GMA Network Inc. (GMA7) surfaced last week.

The Philippine Daily Inquirer reported on January 24 that unnamed sources have said that Ramon Ang has offered to pay P10.80 per share to owners of GMA7 to acquire a 30% share in the media outfit. This price represents a 22% premium on GMA7 stock’s closing price on Friday last week.

Not through SMC or Top Frontier

GMA Network takeover: Ramon Ang vs. Manny PangilinanAccording to the said article, Ang is making the offer in his personal capacity and not through his businesses San Miguel Corp. (SMC) or Top Frontier Holdings (TFHI).

Of course, we are already aware that there’s another player who has been very vocal in his interest to acquire GMA7. Manny Pangilinan (aka MVP), top honcho of PLDT, Metro Pacific Investments (MPI) and TV5, has already attempted to buy GMA7 at least twice in the past, but negotiations always fell through.

Regulatory concerns

In 2012, MVP said “regulatory risk” was the primary deal-breaker during that round of negotiations. As a TV network, GMA7 holds a Congressional franchise and any planned takeover must be approved by the government. This becomes more difficult for Pangilinan’s PLDT group to acquire GMA7, since the former also has majority stake in other media outfit, TV5.

Recently in December 2013, MVP announced he has resumed negotiations with the Gozon, Duavit and Jimenez families — majority owners of GMA7 — for another round of acquisition talks. It was reported that his offer was P9.00 per share for a minority stake, slightly lower than Ramon Ang’s offer.

MVP-Ramon Ang previous bidding wars

The GMA7 acquisition is reminiscent of several previous tug-of-war battles between Pangilinan and Ang.

In 2009, the attempt by both parties to takeover power distributor Meralco (MER) led to a price bidding war. In January 2009, MER stock was trading at P58.00 per share. Rumors of an acquisition war between Ang and Pangilinan consequently led to price increases, with MER trading at a then-all-time high price of P295.00 in July 2009 — a 275% price surge in just 7 months. (See: Meralco stock surges 275% due to Ang-MVP bidding war)

Pangilinan ultimately won that fight, and his MER stake was sealed at around 48%. Ramon Ang settled for a 27.1% minority stake. In October 2013, Ang decided to fully divest from Meralco. He sold all his and SMC’s shares of Meralco to the Gokongwei family’s JG Summit Holdings (JGS) for P72 billion or P235.55 per share.

In August 2009, the same stock price increases resulted from another alleged bidding war by the Ang and Pangilinan groups. This time, the stock at play is Philex Mining Corp. (PX), the Philippines’ largest mining company. (See: Philex bidding war: MVP vs. Ramon Ang)

Pangilinan’s First Pacific Group already has a 22% controlling stake, but Ramon Ang said that Social Security System offered him its 22% stake in PX. Pangilinan was said to be bidding for the same block of shares, causing the stock price of Philex to surge.  From June to August, in just those 3 months, PX rose 108%. Ramon Ang eventually backed off, leaving Pangilinan at the helm of PX.

In 2011, another rumor surfaced that the two factions are again fighting, this time to acquire the flag carrier Philippine Airlines (PAL). The rumor immediately died down after Ramon Ang confirmed his company has already gotten approval to acquire a majority stake in the airline. MVP’s camp, meanwhile, appeared not interested in PAL. (See: Ramon Ang, not MVP, to buy Philippine Airlines)

In the case of the GMA7 acquisition issue, are we to see another bidding war between Ang and Pangilinan?

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James Ryan Jonas teaches business management, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.2 Billion ($56.4 Million) worth of retirement funds on behalf of thousands of UP employees.