Premiere Entertainment eyes merger with Nextmobile Inc

Publicly-listed movie firm Premiere Entertainment Productions Inc. (PEP) is considering a merger with Nextmobile Inc. (formerly Nextel Communications Phils. Inc.) in line with plans to redirect its core operations to telecommunications and information technology businesses.

In a disclosure to the Philippine Stock Exchange, PEP president and chief executive officer Anastacio P. Diaz Jr. said the firm has entered into a memorandum of understanding with Nextmobile to conduct a formal due diligence on each other for the purpose of determining the terms and conditions of a possible merger of both companies.

Diaz said that in the event a merger is finalized, the terms and conditions shall be submitted to the stockholders of each company for approval.

The move is being pursued in light of the continued slowdown in the movie-making industry since 1998. In 1999, PEP made no film releases compared with three the previous year.

PEP earlier shut down its film production operations as well as its bingo activities and instead concentrated on roving cinema and film distribution businesses.

Nextmobile, meanwhile, was acquired by a consortium composed of Finnish, Swedish, American and Filipino entrepreneurs last year. It is similarly undergoing a major restructuring and will be concentrating on services different from what Nextel Philippines had focused on, which was in the area of trunked radio, pager and mobile phone services.

Nextmobile, which is led by the Velarde group, started negotiating for the acquisition of shares in Nextel Philippines in March last year. With its partner Maxwealth Consultant Ltd. the acquisition was finalized only last November.

US-based Nextel International, Inc., the parent of Nextel Philippines, now has minimal ownership in the local company with Filipinos owning majority of the new firm.

Nextmobile earlier launched its wireless Internet service, Nextel Online, which would enable its users to surf the Internet as well as send and receive an e-mail through their handsets.

The firm will initially market mobile Internet for Ipaq, Palm Pilot and wireless phones, which provide unlimited Internet access anytime for a fixed monthly rate. This will allow users full connectivity to the Internet and to their own corporate enterprise information system, allowing mobile and remote users to fully interact with their network and utilize all the applications as if they are connected by wire to their office LAN (local area network).