Share offer may transform Piltel into holding firm

MANILA, Philippines - Pilipino Telephone Corp. (Piltel), which provides mobile phone services through the Talk ‘N Text brand, may soon be transformed into a holding company once its parent, Smart Communications Inc., fully acquires its shares. Piltel made this announcement after its board was “informed of Smart’s intention to make a tender offer to Piltel’s minority shareholders," it said in a statement disclosed to the Philippine Stock Exchange (PSE). Smart, which owns 92.8 percent of Piltel, is offering to buy the company’s remaining 839,979,054 shares at P8.50 apiece, the same statement said. The tender offer period will begin on July 1 at 9:30 am and end on July 29, 2009 at 12 noon, Piltel said. Smart’s offer price is 15 percent higher than the P7.40 share price when the proposed transaction was first announced, 13 percent more than the volume-weighted average share price from January 2, 2008 to June 18, 2009 of P7.51, and has an 11 percent premium over the average share price for 2009 of P7.69. The offer price is also five percent more than Piltel’s closing share price on 19th June 2009 of P8.10 and 20 percent higher than the average share buyback price of P7.09. Smart is the wireless arm of the Philippine Long Distance Telephone Co. (PLDT), the country’s leading telecommunications firm. Shares of Piltel rose 20 centavos to P8.30 apiece during Monday’s trading at the PSE. The tender offer is “intended to provide an exit opportunity for Piltel’s minority shareholders, given the change in Piltel’s business direction," Piltel said. If approved by shareholders, the transaction will “transfer or sell its cellular assets, subscriber base, and Talk ‘N Text trademark to Smart," Piltel said. Upon completion, the transaction will transform Piltel into a holding company, with its 20 percent holdings in Meralco – the Philippines’ leading electricity distributor – as its major asset. The matter will be taken up during Piltel’s annual general meeting on June 30. Smart’s offer is being studied by the independent committee (IC) of Piltel’s board in consultation with CLSA Exchange Capital Inc., the appointed independent financial advisor. The IC review is expected to be completed by June 25, 2009. - GMANews.TV