GMA Network Is Open to Purchase Offers as CEO Forecasts 20% Profit Growth
GMA Network Inc. (GMA7), the Philippine media company that’s jumped almost 50 percent in Manila trading this year amid takeover speculation, will consider purchase offers, its chairman said.
“If the price is right, if we receive an offer that we think is good, we will consider it,” Chairman and Chief Executive Officer Felipe Gozon said in a phone interview yesterday. “There are no negotiations nor a price offered. I’m not closing the possibility that an offer will be made.”
Profit for GMA Network, the nation’s biggest media company by market value, may rise more than 20 percent this year, Gozon said. Its stock price has climbed 48 percent this year amid speculation that Manuel Pangilinan, chairman of both Philippine Long Distance Telephone Co. (TEL) and Associated Broadcasting Co., is in talks to buy control of the bigger rival.
“The signal received by the market is that GMA will have a new shareholder in the person of MVP,” said Astro del Castillo, a managing director at First Grade Holdings Inc. in Manila, referring to Pangilinan by his initials, as he is known in the Philippines.
GMA Network fell 1.5 percent to 9.75 pesos as of 11:38 a.m. in Manila trading.
Gozon said he and GMA Network President Gilberto Duavit hold a common position on any potential sale. The company is controlled by the families of Gozon, Duavit and Menardo Jimenez, its three biggest shareholders.
The company expects net income to rise more than 20 percent this year after falling in 2011, Gozon said. It has signed 85 percent of its target advertising revenue for 2012, he said.
Profit probably decreased by about 1 billion pesos ($23 million) last year from 2.8 billion pesos in 2010, when revenue was boosted by 2 billion pesos in non-recurring political advertisements, Gozon said.
The Philippines voted in President Benigno Aquino, new legislators and local officials in May 2010 and will conduct mid-term polls in May 2013.
Slower economic activity, due in part to Europe’s debt crisis, is a risk to this year’s outlook, Gozon said.
A media venture of Pangilinan’s company, known as PLDT, came close to buying a controlling stake in GMA Network in 2001. The deal was scuttled on valuation issues.
“We were not number one then, but we are now,” Gozon said. The company’s headcount has expanded more than eight times from the 350 employees it had when PLDT’s Mediaquest Holdings Inc. agreed to buy control in 2001.
Mediaquest bought Associated Broadcasting in 2009 from businessman Antonio Cojuangco.
Pangilinan is also chairman of Philex Mining Corp. and chief executive officer of Hong Kong-listed First Pacific Co., a food, utilities and resources company controlled by billionaire Anthoni Salim.
To contact the editor responsible for this story: Michael Tighe at firstname.lastname@example.org