Smart Offers to Buy Out Minority Shareholders in Subsidiary

Philippine operator, Smart Communications has proposed to buy out the minority shareholders in Pilipino Telephone Corp. (Piltel), offering a 15% premium over the shareprice before the deal was announced.

Smart already owns 92.8% of Piltel and is likely to be paying around US$147 million to buy out the remaining shareholders.

Piltel announced plans to sell its entire mobile assets to its parent company, Smart earlier this year and is left with just a 20% stake in a local electricity generating company, Manila Electric as its main asset.

"Smart's tender offer is intended to provide an exit opportunity for Piltel's minority shareholders, given the change in Piltel's business direction," Piltel said.

Piltel said over the weekend that the independent committee of the board had been conducting a review of Smart's anticipated tender offer. The review is expected to be completed later this week.

According to figures from the Mobile World, Piltel ended Q1 '09 with just under 15.6 million customers. Its parent company, Smart ended the same period with 21.3 million customers - and its combined base gives it a market share of 51.5%.