Globe Telecom told the stock exchange it would purchase from Bayan Telecommunications Holdings Corp. and Lopez Holdings Corp. all the equity in the capital stock of BayanTel held by BTHC and LHC, valued at about 1.83 billion.
The transaction involves up to 70,763,707 BayanTel shares and increases Globe’s equity interest in BayanTel from 56.87 percent to 98.57 percent of the outstanding capital stock.
The deal came after the National Telecommunications Commission approved the conversion BayanTel debt by Globe into equity as provided under the ruling of a rehabilitation court.
The regulator’s approval will give Globe a 54-percent ownership stake in the BayanTel owned by the Lopez Group.
Globe acquired 98.26 percent of BayanTel’s loans and 100 percent of Radio Communications of the Philippines Inc.’s liabilities. RCPI, a unit of BayanTel, is owned by the Lopez Group.
The acquisition cost of $130 million was lower than the $400-million face value of BayanTel.
Globe president Ernest Cu had said his company and BayanTel were looking into various forms of collaboration that would benefit both companies, including DSL (digital subscriber line) and broadband.
Globe secured NTC approval of the joint use of BayanTel’s frequencies in the 1750-1760 megahertz/1845-1855 megahertz range.
The joint use agreement will allow Globe to address the increasing demand for voice, SMS and mobile data services, and BayanTel to offer its mobile telecommunications services to customers.
Besides frequency, Bayan has an existing nationwide network, which is composed of satellite, terrestrial and land/submarine-based cable facilities.
The NTC approved the takeover of BayanTel by Globe Telecom Inc. amid opposition from rival companies.
The NTC said “the acquisition by Globe of controlling interest in BayanTel pursuant to the court-approved amended rehabilitation plan and master restructuring agreement neither poses any prejudice to the public interest and convenience nor will make the service fail to operate or function better,” the NTC said in a 19-page decision.
The regulator said the joint application of BayanTel and Globe would enhance competition in the cellular mobile and broadband markets, rejecting the claim of rival Smart Communications Inc. that it would result in grossly disproportionate assignment of radio frequency.
Philippine Long Distance Telephone Co., Digitel Mobile Philippines Inc., Next Mobile and Eastern Telecommunications Philippines Inc. also opposed the transaction.
