Capital International backs Philippines media conglomerate
Capital International has invested PHP2.5 billion ($60.7 million) in ABS-CBN Corporation, the Philippines’ largest media and entertainment company. The funding will be used to support ABS-CBN’s platform expansion, including boosting its digital terrestrial television offering.
According to a regulatory filing, Capital International Private Equity Fund VI and its affiliates will buy new Philippine Deposit Receipts (PDRs) issued by ABS-CBN with a value of PHP43.225 apiece. This represents a 2.1% discount to the 45-day volume-weighted average.
The company is raising a total of PHP4 billion, with Lopez Inc, a private holding company of the Lopez family, subscribing to PHP1.5 billion in new common shares. ABS-CBN is controlled by another Lopez group entity and, after the issue, Lopez Inc. will hold 56% of outstanding common shares and voting control of 79% of all outstanding shares.
"We are glad to have earned the support of our controlling shareholder and one of the world's largest investment management and private equity firms in our pursuit to deliver enhanced value to all of ABS-CBN's stakeholders," said ABS-CBN Chairman Eugenio Lopez III.
ABS-CBN operates free-to-air radio and television as well as the Philippines' largest cable TV network. It activities also include television programming, films, publishing, licensing and websites. The company was formed in 1957 through the merger of Alto Broadcasting System and Chronicle Broadcasting Network.
Capital International's sixth fund closed at $3 billion last May, exceeding its target of $2.5 billion. The fund acquires significant minority stakes or controlling positions in middle market companies in Asia, Latin America, Africa and the Middle East.
The private equity firm's other media investments in Asia include a minority stake in India's Multi Screen Media, bought for $200 million in 2000. It is expected to exit the holding to Sony Pictures Television as the Japanese conglomerate's TV production subsidiary assumes full ownership of the business.
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