GMA Network Inc. (GMA7) fell the most in eight months after a Philippine Long Distance Telephone Co. (TEL) retirement fund venture ended talks to buy a majority stake in the nation’s largest broadcaster by market value.
GMA plunged 8.3 percent, its biggest drop since Feb. 7, to 8.27 pesos at the close in Manila trading. “Parties have been unable to arrive at mutually acceptable terms despite the continual discussions and efforts exerted in good faith,” PLDT and GMA said in separate disclosures to the stock exchange.
PLDT will pursue its media strategy by building on its investments in TV 5, the nation’s third-largest television network, and in Cignal TV, a satellite television service, PLDT Chairman Manuel Pangilinan said today in a statement. The carrier had said in June it was discussing the acquisition price with GMA Network’s three main shareholders.
“GMA’s run-up was in anticipation of an event that it will be taken over,” said Alex Pomento, head of research at Macquarie Securities’ Manila unit. “Unfortunately, that didn’t happen.” There were concerns the deal was expensive, he said.
GMA has gained 25 percent so far this year, matching the 25 percent advance in the benchmark Philippine Stock Exchange PSEi Index. PLDT rose 0.4 percent to 2,756 pesos today.
GMA said it was unable to come to agreement with PLDT, without elaborating on what was being negotiated.
“It was our inability to resolve certain issues which have nothing to do with the price,” GMA Chairman Felipe Gozon said in a mobile-phone text message.
“The termination of the GMA acquisition initiative is not expected to adversely impact the PLDT Group’s strategy of evolving from a traditional telecommunications company into a multimedia service company,” Pangilinan said in the statement.