Philippine phone company still tangled up


PLDT workers protest a takeover bid by Manila businessman John Gokongwei, and show support for their chairman

By Alex Frew McMillan

HONG KONG, China (CNN) -- The future of the Philippines' largest mobile and fixed-line phone company, Philippine Long Distance Telephone, remains up in the air after its annual meeting.

As expected, PLDT shareholders reelected the board of directors, headed by chairman Antonio Cojuangco Jr., at Tuesday's meeting in Manila.

While they voted, workers of the phone company demonstrated against the sale of PLDT in the heart of Manila's business district, Makati.

The board has already stated that the sale would be detrimental to the company and is likely to oppose it (full story).

Feelings running high

Feelings are running high following the decision of Hong Kong-based First Pacific's decision to sell its controlling stake in the phone company.


The PLDT board, headed by Chairman Antonio Cojuangco (r), say the deal will be negative for the phone company

Chinese-Filippino tycoon John Gokongwei has lined up a deal to buy that 24.4 percent share in PLDT from First Pacific.

The total tab is around $925 million, including a 50 percent share in property development company Bonifacio Land Corp., part of Metro Pacific Corp (full story).

Technically, the deal would be a joint venture, with the Gokongwei family owning two-thirds and First Pacific, one third.

First Pacific is looking to offload its share of PLDT after it wiped out 14 years' worth of profits with last year's losses (full story).

Gokongwei says the only shareholder blocking the sale is Japan's largest telecom, Nippon Telegraph & Telephone Corp., which owns 15 percent of PLDT.

NTT repeats right of refusal

NTT's representative at Tuesday's meeting restated the Japanese company's position, that it has first right of refusal on the First Pacific stake.

"First Pacific is not in a position to breach that agreement," Taketo Suzuki said, according to Business World of the Philippines.

PLDT President Manuel Pangilinan declined to reveal his plans for the company at Tuesday's meeting. But he is widely believed to be readying a management buyout of the stake, drawing on chairman Antonio Cojuangco Jr. and the backing of NTT.