GMA Network revives IPO plan

Broadcasting firm GMA Network will push through with its planned initial public offering (IPO) in the first quarter of next year as management prepares the groundwork including securing the needed approvals for the stock market listing.

As this developed, The STAR learned that Philippine Long Distance Telephone Co. (PLDT) chairman Manuel V. Pangilinan has not revived his offer to acquire a stake in GMA, the operator of top ranking TV station Channel 7, after getting the cold shoulder from the latter’s owners, particularly current chairman and president Felipe Gozon who owns 30 percent of the broadcasting company.

In the last meeting between Pangilinan and Gozon, the latter reportedly asked the PLDT top honcho to give him an offer he cannot refuse. "But that’s just his polite way of saying he is not interested," a highly placed source said.

Pangilinan has offered to initially acquire a minority stake in GMA but wanted a clear path towards majority ownership, which Gozon was reportedly not willing to give up. Since then, Pangilinan has not initiated another talk with the GMA chairman. The other owners of GMA include the Jimenez and Duavit families, which own 35 percent each.

GMA earlier appointed Deutsche Bank and ATR-Kim Eng Securities as joint lead underwriters for the IPO, involving as much as 30 percent of its shares from which it expects to generate about P9 billion in sale proceeds.

GMA, now the country’s most profitable broadcasting network, revived plans to offer part of its shares to the public after its majority shareholders found a way to iron out their differences. The Gozon and Duavit groups wanted the majority owners, including the Jimenezes, not to sell their stake or part of it within a certain period after the IPO, following reports that the latter was in talks to sell its stake to PLDT.

The IPO will also be structured in such a way that the shares that will be offered to the public will be widely dispersed in order to prevent a single group, such as PLDT, from cornering it.

GMA earlier said it remains on track of reaching its year-end target as it posted a net income of P1.044 billion for the first six months of 2005, 39 percent higher than its net profit of P752 million for the same period last year.

Gozon said he is optimistic the company will finish strong this year and expects more positive results after the network has completed its expansion projects. "Once our regional and international expansion efforts are completely in place, we expect to improve further on our performance."

In deciding to push through with the IPO, the company said the majority owners of the network wanted to give the public the chance to become shareholders of a company which engages in public service, through the IPO, without losing management control of the company.