MANILA, Philippines – Giving up control of one of the country’s top newspaper groups, The Philippine Star, is a “hard decision,” but one that Belmonte family members feel is the right thing to do.
This is according to Miguel Belmonte, son of House speaker Feliciano Belmonte Jr. and president and CEO of Star.
The Belmontes are selling part of their stake in Star to Philippine Long Distance Telephone Co. (PLDT), led by businessman Manuel V. Pangilinan or MVP as he is fondly called by colleagues. PLDT is eyeing to own up to 80% of Star in a transaction that may be sealed within a year, Belmonte told Rappler in a phone interview. The MVP group would also buy control of Star’s affiliates, he added.
The Belmontes – Miguel in particular – have been running Star for 27 years since it was founded in 1986.
Belmonte said aside from cashing in on the family’s investment, a deal with the PLDT group is the best way to extend the life span of Star.
“Partnering with a tech company like PLDT will extend the life span of our paper. Our expertise is on publishing – as we know it, the hard copy. Since the digital age is upon us, we feel that their capability in that area is far superior than what we’re capable of doing. They will be a strategic partner to have.”
“It’s not easy for me to leave or let go. At the very least if I leave, I should know in my mind we’re leaving them in good hands. With MVP, it’s not just good hands, these are the best hands possible.”
He said several groups are interested in buying Star, but “MVP is the most viable, our best choice.”
PLDT has been aggressively buying media assets as part of its “convergence” strategy. It wants to evolve into a “multimedia service company” amid declining returns from its traditional telecommunications business.
Belmonte said he sees the wisdom in this strategy and it is a “major factor” in his family’s decision to sell.
The MVP group is building a media empire, acquiring stakes in print and broadcast companies.
The businessman, who oversees other major assets in the country such as roads, hospitals, power and water utilities, earlier sounded the death toll for the future of telecom services.
He said these would be “obsolete.” Providing content is the only way to go.
He said PLDT wants to connect Filipinos through its network and also supply the content they’re sharing.
This was the reason behind the move to buy stakes in Star, another major newspaper group Philippine Daily Inquirer, business paper BusinessWorld and television network TV5. PLDT also attempted to acquire broadcast giant GMA Network Inc., but talks fell through.
Agreed ‘in theory’
No agreement has been signed yet, Belmonte said, although they’ve discussed the matter and “agreed on all points in theory.”
“At the end of the day, Mr. Pangilinan, the PLDT group should own between 60% and 80% of [Star]. Our family wants to retain 20%,” he said.
Belmonte said this depends of course in the ability of the PLDT group to negotiate with and buy the shares of other minority stockholders.
The PLDT group now has a 20% stake in Star, while the Belmonte family owns 51%. Belmonte said a holding company called Leadway Holdings and Sara Soliven De Guzman, daughter of the late Star publisher Max Soliven, each own 10%. Menardo Jimenez, one of GMA Network’s owners, holds 5%, and the heirs of the Asuncion and Esposo families hold 2% each.
“It’s gonna be a process. The MVP group is planning 3 phases to this process,” said Belmonte.
“We’re expecting within a one-year period starting now that everything shall be concluded already,” he added.
Star affiliates, too
Acquisition talks also include Star’s affiliates, where the PLDT group intends to purchase up to 80% stakes as well, according to Belmonte.
The Belmonte family owns 3 other corporations – tabloid company Pilipino Star, printing company Pilipino Star Printing, and Internet company Philstar Global.
“PLDT is investing in all of them across the board. Our family now owns 80% of the 3, MVP group owns 20%. We’ll just switch after the transaction.”
Belmonte said in all, the Star group has a valuation of about P5 billion.
Asked how much they would be selling the companies for, he said: “We haven’t really sat down to do the math. But it’ll be considerable.”
“He’s (MVP) gonna spend a lot less than [P5-B], of course.” – Rappler.com