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 GMA Network for sale at P100 billion - Gozon

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PostSubject: GMA Network for sale at P100 billion - Gozon   Thu May 17, 2012 11:00 am

MANILA, Philippines - The three major owners of broadcast company GMA Network will sell their stakes to a buyer that will offer P100 billion for 100 percent of the company.

“I will sell for P100 billion, and this includes the 23 percent held by the public. At P100 billion, I will sign with my eyes closed,” GMA chairman and CEO Felipe Gozon said.

According to Gozon, more than one conglomerate has offered to acquire GMA and one of them is the group of Manuel V. Pangilinan, which owns rival TV 5. There were earlier reports that Pangilinan had offered P40 to P45 billion for a 100-percent stake in GMA.

Gozon said that at the moment, they have not received an “acceptable” offer. “If we receive an acceptable offer, then we will sell our entire stake in the company,” he added. The 77-percent stake not held by the public is owned by Gozon, the Duavits and the Jimenezes.

As to what is an acceptable offer, Gozon said “price is the start of everything.”

Sometime in 2001, Pangilinan’s group offered around P48 billion for 100 percent of GMA 7. GMA president and COO Gilberto Duavit Jr. said the talks between them and Pangilinan did not materialize because the PLDT group had to prioritize the financial needs of Piltel.

Gozon said yesterday that a second company apart from the PLDT group has expressed interest in buying into the broadcast firm. He however refused to divulge the identity of the company.

“There were others who expressed interest. Of course, Filipino conglomerate. GMA is very attractive and desirable not only to MVP,” Gozon said, referring to Pangilinan.

“It’s always the price,” Gozon said in trying to explain why the PLDT group’s acquisition bid has failed to prosper.

Gozon’s statement comes in the wake of a statement attributed to San Miguel Corp. (SMC) chief executive officer Ramon Ang that GMA Network’s owners are his friends and that they would not sell to the PLDT group.

He also clarified that there are no negotiations at the moment with any group although Gozon said that Pangilinan has expressed his interest a long time ago but “he never lost interest.”

“The first transaction did not push through but his interest remained. But the company remains very attractive and desirable not only to MVP. There were others that expressed interest,” he said.

As this developed, the company announced that net income for the first quarter of 2012 reached P388 million, down 27 percent, which officials said is a strong start from a lukewarm closing in 2011 but lower than last year’s P534 million.

Consolidated revenues for the first three months of the year dropped four percent to P3.002 billion from P3.138 billion in the same period last year. Earnings before interests, taxes, depreciation and amortization (EBITDA) was down 18 percent to P760 million.

Officials however expect the numbers to pick up in the succeeding quarters.

Capital expenditure for 2012 has been set at P679 million of which P183 million has been spent. Of the remaining amount, around P150 million will be used for the construction and equipping of two new regional stations in Ilocos Sur and in Naga, while another P100 million will be for the further upgrade of transmitter networks in rural areas.

“We are moving towards the rural areas and increasing our reach in Northern Mindanao and portions of the Visayas. We acknowledge that ABS-CBN is ahead in terms of the rural areas but they were 10 years ahead. If you look at the Philtam (total nationwide), the difference is a lot more encouraging than we expected. It is not an insurmoubtable difference. We are looking at winning even in rural areas this year,” Duavit said.

Gozon said he expects revenues for the whole of 2012 to reach P14 billion while net income is forecast at P2.8 billion.

“The first quarter result is what we call bumubuwelo or pumuposisyon. As I speak now, our gross airtime sale for channel 7 is almost P1 billion already. That gives us the confidence that we are on the right track,” he said.

He pointed out that as early as last February, they had captured 85 percent of their sales projection for the entire year.

Gozon also expects advertising spend to improve this year. “I just attended the presentations of Coca-Cola, Unilever, P&G. Their top executives came here. From our conversations, they told me that they are expecting Asian countries including the Philippines to propel their revenues, Considering that Europe still has this debt crisis problem which they have not surmounted, and the US will have their presidential election and their unemployment problem has not been resolved, these giant multinationals are looking at this part of the world to compensate for the growth they are expecting this year,” he added. - By Mary Ann Ll. Reyes (Philstar News Service, www.philstar.com)

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