PLDT drops SkyCable bid, cites competition concerns

PLDT Inc. has dropped its bid to acquire ABS-CBN's Sky Cable Corp., citing anti-trust concerns as any deal struck could possibly be overturned by the Philippine Competition Commission moving forward.

PLDT chairman and chief executive officer Manuel Pangilinan on Thursday said the company initially put out an offer for SkyCable given provisions under the Bayanihan to Recover as One Act or Bayanihan 2, which exempted several mergers and acquisitions valued below P50 billion from the scrutiny of the PCC.

"In the beginning kasi, when I think it was sort of, when we learned that SkyCable might be for sale, we deliberately did not, we were not interested because we knew that the PCC would not approve an acquisition by PLDT of Sky, because there was clearly a consolidation aspect to it," he told reporters in a virtual briefing.

"We were encouraged by the Bayanihan Act 2 was passed so we put in an offer indeed to the ABS, but then on further review by ourselves and by our legal council, we were told that there's this risk of possible divestment by us on review starting the second year of the act so that's really the main reason. Beyond that, there's no other reason," he added.

Under the Bayanihan 2, mergers and acquisitions valued below P50 billion are exempted from the compulsary PCC notification, provided that it is entered into within two years from the effectivity of the law.

Motu proprio review of these transactions are also suspended for a year, but the PCC said deals that are likely to substantially lessen competition may be reviewed after the period.

Under the Philippine Competition Act (PCA), the PCC is mandated to review mergers and acquisitions to ensure that such deals do not harm the interest of consumers.

"We have withdrawn from the bidding process, at least as we understand it, for SkyCable. The main reason if I may say this, is that there are other commercial reasons why we did that but I think the main reason that we did that is on review of the Bayanihan Act 2," said Pangilinan.

"The PCC has the ability to review mergers and acquisitions one year after the effectivity of the act and possibly reverse agreements which have been struck in the course of that first year. Of course we're concerned that that risk might arise. The risk is there and the prospect of divestment might be real and we decided not to attract that risk," he added.

In June, the National Telecommunications Commission (NTC) ordered Sky Cable to stop its direct broadcast services under SkyDirect after its franchise lapsed.

In the same briefing on Thursday, PLDT reported an 8% climb in its telco core net income in the first nine months of the year to P20.965 billion from P19.408B the same period last year.

Total revenues for the same period rose 7% to P133.222 billion from P124.436B , while service revenues grew 7% to P127.849B from P119.008B . —LBG, GMA News