The Gokongwei group announced on Wednesday that it is withdrawing its offer to buy out First Pacific's 24.4 percent stake in PLDT and 50.4 percent interest in BLC.
In a letter to FPC dated Oct. 2, Gokongwei group legal counsel Perry Pe said their decision to withdraw the offer was made in the light of FPC's inability to perform and satisfy the terms and conditions of the memorandum of agreement entered into last June 4 between the two parties, the difficulties encountered by FPC in attempting to implement the transaction, and the difficulties encountered by FPC to complete the transaction within agreed time frame.
He also cited as a reason the open resistance of the current management of both the PLDT and Metro Pacific/Bonifacio Land to the transaction.
In a statement released yesterday, First Pacific said it has accepted the termination of the MOA by the Gokongwei group and, accordingly, the transactions contemplated by the agreement will no longer proceed.
It added that following the termination of the MOA, all obligations under the said agreement have ceased and it is not anticipated that there will be any further liabilities or obligations other than continuing obligations of confidentiality.
The June 4 MOA called for the creation of a joint venture company to be participated in two-thirds by the Gokongwei group and one-third by FPC that will take over the latters Philippine telecommunications and real estate businesses.
First Pacific likewise emphasized that no negotiations or discussions in relation to a specific transaction are currently ongoing. "First Pacific will make such further announcements as may be appropriate in the event that there are future material developments in relation to its Philippine investments, the termination of the MOA or the impact of such termination on First Pacific," it said.
Earlier, First Pacific said it was selling its Philippine business interests (it was supposed to receive around $730 million over a three-year period from the Gokongweis if the deal materialized) to meet some of its debt obligations and to invest part of the proceeds in other businesses in the region.
There were, however speculations that First Pacific director and controlling shareholder Anthoni Salim wanted to cash in on his investments in order to pay part of his debts to the Indonesian government.
Pe, in his letter addressed to First Pacific director Anthoni Salim who engineered the deal, executive vice-president Michael Healy, and general counsel Ronald Brown, said that in view of the expiration of the exclusivity period granted by FPC to the Gokongwei group last Sept. 30, FPC may now pursue the transaction with third parties.
The First Pacific group (through its Philippine affiliates) has aggregate attributable direct and indirect economic interests of 24.4 percent of the issued common stock of PLDT (conferring voting rights of approximately 31.5 percent of the outstanding voting share capital of PLDT) and 80.6 percent of Metro Pacific Corp. (MPC).
MPC, in turn, has a controlling 72.9 percent shareholding in BLC, of which 50.4 percent of the outstanding common stock of BLC is subject to a pledge in favor of Larouge BV, a wholly-owned subsidiary of First Pacific, to secure a loan advanced by Larouge to MPC in April 2001 in the principal amount of $90 million ($109 million including interest).
There are reports that First Pacific may now seek to arrive at a deal with Greenfield Development Corps Jose Yao Campos and Ayala Corp. which have earlier expressed interest in that portion of Bonifacio Land that is up for grabs.
It was learned that the Campos-Ayala consortium is preparing to submit anytime now its offer for the purchase of FPCs 50.4 percent stake in Bonifacio Land. Earlier, Ayala Corp. president Jaime Augusto Zobel de Ayala II confirmed that talks are going on involving the possible takeover of Boni Land. But Ayala Land said it has not reached an agreement on the extent of participation it will have in this (debt restructuring) program.