FirstPac still keen on PTIC buy, with shareholders' OK

(Update 2) - Hong Kong's First Pacific Co. Ltd. on Wednesday said it is still keen on buying the Philippine government's 46 percent stake in Philippine Telecommunications Investment Corp. (PTIC), but has yet to get shareholder approval for a takeover of the PTIC shares in case Japan's NTT DoCoMo does not join it in the acquisition. The PTIC shares were supposed to be transferred to First Pacific Wednesday, January 31, but the signing was cancelled due to appearances that the Hong Kong Firm would be backing out of the deal. "First Pacific confirms that it still intends to exercise the right to match but would now want to have the flexibility to exercise the right to match up to the full extent of the 46 percent stake in PTIC offered under the auction through the exercise of PTIC's right to match under its articles of incorporation," First Pacific said in a statement. First Pacific said that under the rules of the Hong Kong Stock Exchange, it can only match half of the PTIC stake alone without formal shareholder approval. It would need to seek shareholder consent to acquire a larger chunk of PTIC by itself. "The exercise of the right to match to that extent (46 percent) would constitute a major transaction and accordingly requires the prior approval of a resolution of shareholders," First Pacific said. First Pacific said that as of Tuesday, January 30, it had wished to match the bid for 23 percent of PTIC and just acquire the remaining 23 percent when the stockholder approval arrived. However, the firm said it did not receive approval from the Hong Kong Stock Exchange for the plan. Earlier reports had said NTT-Docomo, a leading telecom firm in Japan, was planning to join First Pacific in matching Singaporean hedge fund Parallax Capital Venture's P25.2 billion bid for the PTIC shares. "It has not, to date, been possible to reach final agreement with NTT Docomo in this regard," First Pacific assistant vice president Sara Cheung told GMANews.TV in an interview. "But this does not mean that First Pacific will match the bid alone. We just want to have the flexibility in case we have to match the bid on our own," Cheung added. Under PTIC's articles of incorporation, other PTIC shareholders have the right to match the bid for the government's stake in PTIC. If other PTIC shareholders waive the right, the stake transfers to Parallax. The government's stake in PTIC translates to ownership of roughly 6.4 percent in telecom giant Philippine Long Distance Telephone Co. Both First Pacific and NTT Docomo hold sizeable chunks of PLDT as well. A statement from the Department of Finance released Tuesday night had sparked fears that talks between the government and the Hong Kong firm had collapsed, despite earlier assurances by First Pacific that it was very much interested in raising its holdings in PLDT. Part of the statement said First Pacific had "yield(ed) its right to match the government's shares in PTIC to PTIC itself." "The right to match represents an attractive opportunity to increase the interest in PLDT, which is one of the group's principal assets," First Pacific said. "The directors consider that the terms on which the right to match can be exercised are fair and reasonable and in the interests of First Pacific's shareholders as a whole," it added. First Pacific said the funds for matching the bid would come from a combination of internally generated cash and external borrowings. It said it would match the bid no later than March 2. - Patricia de Leon, GMANews.TV