Fidelity Investments acquires 5.13% of PLDT for $64M

Fidelity Investments, the world’s biggest fund company, has acquired 5.13 percent of the outstanding shares of telecommunications giant Philippine Long Distance Telephone Co. (PLDT) for around $64 million, according to a report filed with the Philippine Stock Exchange.

Fidelity said its units FMR Corp. and Fidelity International Ltd. purchased a combined 8.73 million shares or 5.13 percent of PLDT’s 170.24 million issued stock.

In its report, Fidelity said both firms may purchase additional shares in PLDT in the future depending on market conditions but stressed that they have no intention of taking majority control of the telecommunications firm.

"FMR Corp. and FIL (Fidelity International) do not, however, intend to acquire shares of the outstanding voting or equity securities of Philippine Long Distance Telephone Co. to take over control of the company," Fidelity said.

PLDT has welcomed Fidelity’s noting that investment, saying this affirms the positive outlook on the phone company.

PLDT was the most actively traded stock yesterday, closing up one percent at P1,480, buoyed by the optimistic earnings outlook of the Philippines’ largest telecommunications group. PLDT shares have already gained over seven percent since the start of the year.

Despite increased competitive pressures in the telecommunications industry, PLDT posted a record high annual net profit of P28.04 billion for 2004, largely on gains by its mobile phone units Smart Communications Inc. and Pilipino Telephone Corp.

This year, PLDT is eyeing a net income of P27 billion based on the assumption of a stable exchange rate.

PLDT’s 2004 net income was largely driven by a 15-percent increase in consolidated service revenues to P115.3 billion, due to a 27-percent growth in Smart’s cellular service revenues which amounted to P67.4 billion.

Smart and Piltel added more than 6.2 million subscribers last year, bringing the wireless units’ cellular subscriber base to 19.2 million, representing a market share of about 58 percent.

PLDT has earmarked between P18 billion and P20 billion for its capital expenditures this year. Half of the budget will finance its fixed line business and the other half will be used to fund its ongoing cellular network programs.