Tuesday, December 27, 2011

GMA 7 is on MVP's Christmas Wish List

FROM THE RUMOR MILL

Are You Ready for the "Kaputid" Network?

I got this off one of my contacts in Facebook. Rumor has it that Manny V. Pangilinan, a.k.a. "MVP", has made an offer to the Duavit, Gozon, and Jimenez families for GMA 7, and that the offer figure is so "mind-boggling" that it's "impossible to counter." And if you think Ruffa Gutierrez is a reliable source, then it seems that this already is a done deal.


Haven't we seen a similar move from MVP months ago with the PLDT-Digitel merger? If the offer is true and if a deal does materialize, it would be interesting to see the following unfold in the next few days:

  • How much premium MVP is willing to pay to own the undisputed number one network in the country
  • If ABS-CBN would go the same way as Globe and try to block the deal (and how much political clout the Lopezes still have left)
  • How the stock prices of affected players (e.g., PLDT, GMA, ABS-CBN) would be affected 

If the offer is indeed as high as rumored, then we should see significant short-term gains for GMA (up around 5% as of this writing) and possibly a short term drop for PLDT (down around 0.08% as of this writing). If the tremendous growth of TV5 since MVP took control in 2008 is any indication, then a GMA7-TV5 "alliance" should eventually bear significant fruits in the long run; whether this additional value is worth more than the premium paid for the acquisition is another question altogether.

As for ABS-CBN, just like with Globe in the PLDT-Digitel merger, some would argue that the move will also benefit the second player since industry consolidation would decrease competition for the entire industry and all its players. Frankly, I'm not a really big fan of the network and I think I pretty much loath everything the "kapamilya" network comes to represent. Ever since the Lopezes regained control of ABS-CBN in 1986 from Marcos's cronies, it had been in the best position to innovate and provide high quality entertainment for Filipinos, but what it did in the next 25 years was serve regurgitated crap that just made everyone dumber. Anyway, enough about that; I just hope that with this additional pressure will force ABS-CBN finally try to live up to its promise.

***

UPDATE 28 December 2011, 2:22 PM via PhilSTAR.com

GMA has just denied the rumor:

“There is no truth to the rumor ongoing around in social media sites and the Internet that Mr. Pangilinan has bought GMA Network. In fact, there is no negotiation going on between GMA and Mr. Pangilinan regarding the latter’s acquisition of GMA-7.”

And now we know what the rumored "mind-boggling" offer is: 500 billion pesos, or 25 times GMA's current market capitalization of around 20 billion . Wow. Yeah, that can't be right.

GMA 7 shares are down around 0.5% today.

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