PLDT turns back on Sky Cable deal

PLDT's planned acquisition of broadband and cable TV provider Sky Cable has fallen through – a little over a month after the Philippine antitrust agency approved the 6.75 billion Philippine peso (US$119.8 million) transaction.

The aborted deal was announced today by the Philippine telco giant and Sky Cable's parent company ABS-CBN after separate stock exchange filings.

"PLDT and ABS-CBN have mutually decided not to proceed with the sale of Sky Cable to PLDT under the sale and purchase agreement signed by and among the parties in March 2023," said the telco giant in its disclosure dated Wednesday.

The one-sentence statement did not give a reason for the termination of the acquisition deal.

The Philippine Competition Commission (PCC) gave its nod to the acquisition on January 19 "subject to a number of closing conditions".

PLDT's takeover of Sky Cable's broadband business and other related assets was expected to be completed next month, according to news outlet Rappler.

The telco would have gained a "comfortable lead" with up to 48% market share in the Philippine broadband market had the acquisition gone ahead, which would have added 350,000 subscribers to the company's broadband business.

Furthermore, the combined resources of both companies were expected to boost broadband coverage in remote areas.

Related:PLDT gets regulatory nod to buy Sky Cable

With the deal now off the table, Sky Cable said it will continue its cable TV operations, which were scheduled to go off the air on February 26. The company's broadband Internet service, SKY Fiber, remains unaffected.

"We remain committed to providing the same level of customer experience and service for both our cable and internet services," said Sky Cable in an advisory posted on its website today.

For ABS-CBN, the sale of Sky Cable would have generated PHP4 billion ($71.7 million) in gross proceeds that the company needed to fund its content creation business. The media conglomerate pivoted to airing content on digital platforms after the government did not renew its broadcast license in 2020.

A case of déjà vu

The botched deal is the second time PLDT and Sky Cable have failed to complete a planned purchase.

PLDT first showed interest in buying Sky Cable in 2020, encouraged by the "Bayanihan Act 2'' which exempted mergers and acquisitions valued below PHP50 billion ($893.4 million) from compulsory PCC notifications.

Upon reviewing the law, however, PLDT's legal team found that it is possible for the PCC to reverse agreements. The telco operator pulled out over risks of antitrust regulators flagging monopoly issues.

In 2022, the Cignal TV attempted to buy 38.9% of Sky Cable for PHP2.86 billion ($51.1 million), but this was abandoned due to political pressure.

Cignal is a subsidiary of MediaQuest Holdings, which is the media partner of PLDT Group.

The proposed sale of Sky Cable stake to Cignal TV coincided with a planned PHP4 billion ($71.47 million) joint venture between ABS-CBN and TV 5 – also owned by Media Quest Holdings – which did not get off the ground.