The Philippine Competition Commission (PCC) has allowed the sale of ABS-CBN Corporation\u2019s (ABS) Sky Cable Business and its related assets to PLDT Inc (TEL). The proposed transaction however is still subject to a number of closing conditions. <\/p>\n\n\n\n
Both parties told regulators last March that TEL will purchase 100% of Sky Cable\u2019s total issued and outstanding capital stock consisting of 1.3 billion common shares for a total of P6.75 billion or P4.90 per share. In 2022, through Cignal TV, TEL attempted to buy 38.9% of Sky cable for P2.86 billion, however this was scrapped due to political pressures.<\/p>\n\n\n\n
Our View:<\/strong> TEL\u2019s acquisition of Sky Cable will add about 350,000 broadband subscribers to the Company\u2019s base of 4 million subscribers, further enhancing their market leading position in the broadband market.<\/p>\n\n\n\n Initially, the deal will be slightly EPS dilutive (<5% change) as Sky Cable is operating at a loss. However, as TEL winds down the cable operations and with the expected synergies\/integration on the broadband side, the deal should be accretive shortly after a couple years.<\/p>\n\n\n\n For ABS, the sale of Sky Cable would be used to settle and fund its retirement obligations to employees, and it will also allow the company to focus more of its resources into content creation. ABS was once the country\u2019s largest broadcaster, but its franchise was not renewed in 2020 during the Duterte Administration. The company has since turned its focus to programme creation and distribution and streaming.<\/p>\n\n\n\n