Manila, August 12, 2003 (STAR) By Mary Ann Ll. Reyes  - Ayala Corp. and Singapore Telecom failed to agree on the acquisition price for the 24.8-percent stake of DeTeAsia Holding worth about $440 million in Globe Telecom, leaving Globe’s ownership structure in limbo, a highly-placed source told The STAR yesterday.

Last Aug. 8, the 45-day period for the two other major shareholders of Globe to exercise their right of first refusal over DeTeAsia Holding’s stake expired, with no agreement reached between Ayala and SingTel.

A top Globe official told The STAR that Ayala and SingTel could not agree on the price. "But they are still discussing the matter," the official said.

However, the official explained that an agreement can still be reached even beyond the period prescribed under the rights of offer among the three parties. "DeTeAsia can even extend the period,"the source said.

Analysts said the parties could not agree on the price as Deutsche Telekom was reportedly seeking a higher price for its stake in Globe.

DeTeAsia, a wholly owned subsidiary of Deutsche Telekom AG, Europe’s largest telecommunications company, earlier announced that it was divesting its stake in Globe.

Deutsche, whose debts ballooned during a global acquisition spree a the height of the telecoms boom, has been gradually selling Asian assets in the past 14 months to cut debt.

It sold a six percent holding in Malaysian cellular operator Celcom for $114 million in June this year and a 25 percent stake in Indonesia’s second-largest mobile firm, Satelindo, in May 2002 for $35 million.

It has already raised about 4.9 billion euros through asset sales and aims to cut the debt to about three times core earnings, or 50 billion to 53 billion euros, by the end of 2003.

Base on current market value, DeTeAsia’s stake in Globe is valued at around P640 per share or a total of $440 million consisting of 37.67 million shares.

In case Ayala and Singtel indeed decide not to buy DeTeAsia’s stake, they are willing to find a buyer for these shares, Globe officials earlier said.

An independent committee composed of Globe directors Jesus Tambunting, Guillermo Luchangco and Romeo Bernardo was earlier created by Globe to find ways to make sure that DeTeAsia’s shares are entirely sold and to help the latter sell its block.

"We don’t want to create an overhang situation wherein DeTeAsia will still own some shares," Globe chief finance officer Delfin Gonzales Jr. earlier said.

The committee was likewise created to consider measures necessary to protect the interests of all shareholders in the course of the sale of the DT block.

DeTeAsia owns 24.8 percent of Globe’s common shares (and 12.1 percent of total voting shares), acquired via a share-swap arrangement executed when Globe acquired DeTeAsia’s stake in Isla Telecommunications (Islacom). Ayala has a 31.13 percent of the common shares while Singtel has 29.06 percent. Around 15 percent of total common shares are held by the public.

An official from Ayala said the company is working with all parties to come up with a solution to the best interest of Globe and its shareholders.

Analysts said that should Deutsche Telekom offer its shares to other parties, the buyer will have to accept the same offer and terms the German phone firm presented to its joint venture partners Ayala and Singtel.

Singtel earlier said it was interested in increasing its stake in Globe at the right price and terms because it believes that there are opportunities for growth in the Philippine telecommunications sector. –With Zinna de la Peña, Reuters

Reported by: Sol Jose Vanzi

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