The STAR earlier reported that ABC-5 owner Edward Tan had agreed to sell to Cojuangco the broadcast network for P4 billion. Estimates show that the network has an enterprise value of P2 billion, with some P1.2 billion in debt and P800 million in land assets.
Sources privy to the deal said that Cojuangco’s group is now undertaking due diligence investigation of the network, but no major surprises are expected.
Around 50 percent of the total acquisition cost will be put up by Cojuangco himself while roughly 39 percent is being pooled by Bank of Commerce, also owned by the Cojuangco family. The remaining 10 percent will come from several individuals.
Prior to Cojuangco, other parties which had expressed interest in acquiring ABC-5 were Philippine Long Distance Telephone Co. (PLDT) president Manuel V. Pangilinan and RFM Corp. president Jose Concepcion III. There were also earlier reports that San Miguel Corp. (SMC) executive vice chairman Ramon Ang and businessman Antonio L. Cabangon-Chua, in partnership with Citystate Bank of Singapore have also shown interest in the network.
Tan’s asking price was P5 billion and Cojuangco‚s offer was the closest to it, the same sources told The STAR. "Mr. Tan was willing to sell his television station only at the right price," the sources added.
"It’s almost a done deal. They’ve already agreed on the valuation. Due diligence is a formality since Cojuangco’s group is already familiar with the financial aspect of the company. They’re just finalizing certain aspects, such as the amount of receivables," a source familiar with the negotiations told The STAR.
The sources explained that one of the primary reasons for Cojuangco’s decision to acquire ABC-5 is to expand the network and reach of his Dream Broadcasting System, a digital satellite television company.
Dream Broadcasting is the first to offer digital direct-to-home television entertainment via satellite in the country. It utilizes a satellite dish that is set up in the home and an integrated receiver decoder (IRD). Agila II, the Philippines’ very own satellite, picks up information from PMSI, the program provider, and then digitized data is in turn sent back directly to the viewer.
"By acquiring ABC-5, his Dream Television will automatically have a nationwide reach," the source said. ABC-5 has 15 stations and 100 cable TV affiliates nationwide.