Surprise bid stalls PLDT-First Pacific deal

An eleventh-hour bid from a third party yesterday scuppered plans by First Pacific to announce a US$400 million deal to take a 9 per cent stake in Philippine Long Distance Telephone (PLDT), according to well-placed sources.

Sources said the surprise bid was led by former PLDT chairman Alfonso Yuchengco and waylaid the Hong Kong conglomerate's proposal.

It is believed First Pacific has been negotiating to buy Philippine Telecommunications Investment Corp - controlled by PLDT president Antonio Cojuangco and director Antonio Meer, and which has a 9.08 per cent stake in PLDT with 11 million shares.

First Pacific had reportedly agreed to pay $400 million for the stake, representing about a 54 per cent premium to PLDT's market price yesterday.

First Pacific last week said it had acquired a strategic stake in PLDT - below the 10 per cent minimum disclosure level required by Hong Kong regulators - with the intention of buying enough shares to gain management control.

The source also said First Pacific had brought in a partner to help finance the deal - Japanese giant Nippon Telephone & Telegraph (NTT).

'They have sent some people to Manila now, because they're unhappy with the way the deal has been coming together,' he said.

However, a First Pacific spokesman said she had not heard of these developments, nor had any other investors been brought into the negotiations by First Pacific.

'This is all news to me,' she said.

First Pacific requested the stock exchange suspend its shares from trading for several hours yesterday morning. Last night, it issued a statement saying it was in talks with PLDT, 'which if successful, will result in the acquisition of a significant interest in PLDT'.

The discussions 'have not been concluded', it said.

It did confirm, though, 'that it has been in discussion with various stakeholders in PLDT concerning the acquisition of a significant interest in PLDT'.

But 'these conclusions have not been concluded and the First Pacific Group expects that negotiations will continue over the next few days', it said.

The First Pacific spokesman also denied reports from Manila that a joint press conference with PLDT and First Pacific to announce the deal's conclusion had been called, then cancelled.

'No one received any invitations, so how can they say we called a press conference? I don't think Yuchengco has the money to make this sort of deal. Either he's got outside backing or it's a ploy to get First Pacific to bump up their offer price.' It is not known how much the new group has offered for the PLDT shares.

However, several other foreign investors, including US baby bell Southwest Bell, are reported to be interested in investing in PLDT.

First Pacific's Philippine subsidiary Smart Communications operates the largest cellular phone network in the country and has been trying to enter the fixed-telephone market with limited success.

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