PLDT Inc.’s board of directors has agreed to subscribe to 2.49 million shares in Radius Telecom, Inc., representing 34.9% of its equity interest for P2.12 billion, the Pangilinan-led company said on Wednesday.
In a stock exchange disclosure on Tuesday, PLDT said the proposed investment is a strategic move to expand its market share by leveraging Radius Telecom’s fiber facilities.
Under PLDT’s proposed investment, the company’s board of directors approved the subscription to 2.49 million shares of common stock in Radius priced at P849.28 each, pending the execution of definitive agreements.
Radius Telecom provides data and internet services and offers cloud services to businesses and small and medium enterprises.
It is a wholly owned subsidiary of Paragon Vertical Corp., a unit of e-Meralco Ventures, Inc.
China Bank Capital Corp. Managing Director Juan Paolo E. Colet said PLDT is likely to fully acquire Radius Telecom.
“Radius will benefit from PLDT’s extensive expertise in the broadband business. Depending on market dynamics, it’s also possible that PLDT may fully acquire Radius down the road,” Mr. Colet said.
Radius Telecom’s fiber facilities include 150 enterprise buildings, over 200 residential multi-dwelling units, and more than 200 villages.
“This is a strategic move for PLDT as it seeks to expand rapidly in the lucrative broadband market. We expect this deal to generate important synergies and cost efficiencies for both companies,” Mr. Colet said.
“This equity stake allows PLDT to have a substantial influence on Radius Telecoms and aligns with a strategic move to fortify its market position,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.
This move could potentially lead to synergies by combining technological expertise, expanding service offerings, or enhancing customer experience, Mr. Arce said.
“PLDT can benefit from this extensive network by expanding its market coverage and improving its ability to serve both enterprise and residential customers,” he said.
At the stock exchange on Tuesday, shares in the company closed P3 or 0.24% lower at P1,272 apiece.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose
