Oct. 22--THE Philippine Long Distance Telephone Co. (PLDT) group has acquired a majority stake in ABC5.

In a statement, MediaQuest Holdings Inc. said it secured a 75-percent interest in ABC Development Corp., the owner and operator of Channel 5. In addition, MediaQuest reached an agreement with mmStudios SDB BHD, a wholly owned subsidiary of Media Prima Berhad to acquire 70 percent of MPB Primedia Inc. for $16 million.

In a disclosure to Bursa Malaysia Securities Berhad, Media Prima said MediaQuest made a down payment of $500,000 upon the execution of the term sheet on October 6. The remaining $7.5 million is payable on Friday, while the balance of $8 million will be placed in escrow by MediaQuest.

The original cost of the Malay-sians' 70-percent equity interest in Primedia back on February 15, 2008 was P980,420.

Based on the latest available audited financial statements of Primedia, its net liabilities stood at P600.3 million and it incurred losses of P600.6 million.

MediaQuest said the Primedia acquisition would be completed within this month.

Last year, Media Prima created Primedia and entered into a long-term block airtime agreement with ABC5. Under the accord, Primedia will provide content and manage the sale of airtime to the local broadcasting firm.

In addition, Primedia would also serve as consultant to ensure the success of the broadcasting firm's repositioning, launch exercise and transmission quality upgrade.

Analysts told The Manila Times that MediaQuest's new acquisitions would benefit the PLDT group as it will complement existing businesses.

"There would be synergies . . . It's going to be beneficial to [the] PLDT group," Prince Yeung, equities analyst at AB Capital Securities said.

With technological convergence there would be synergies between the group's TV and mobile phone businesses, he said.

Claire Quiray of Regina Capital Development Corp. agreed, saying ABC5 will complement the broad-band and cable TV businesses of PLDT.

MediaQuest said its entry into free-TV will further broaden and strengthen this collaboration with the PLDT Group.

MediaQuest said it investments in ABC5 and Primedia are in line with its strategy of developing media, content and production resources to complement its other media assets and platforms such as Cignal, a direct-to-home satellite service launched in July this year.

By investing in both ABC5 and Primedia, Mediaquest said it expects to further enhance TV5's programming, ratings and sales as well as improve the broadcast network's coverage and signal strength throughout the country.

"Such partnership allows the development of new convergent services through the fusing of telecommunications services with rich multi-media content, which include the recent launch of PLDT's WatchPad and Smart's Sandbox," said MediaQuest, which is the major media and content partner for PLDT and mobile unit Smart Communications Inc.

In October 2003, Antonio "Tonyboy" Cojuangco Jr., owner of Dream Satellite Broadcasting and a former PLDT chairman, led a group that acquired ABC.

Media Quest is a unit of the PLDT's wholly owned Philippine Long Distance Telephone Co. Beneficial Trust Fund. It owns 29 percent of Business World and is a majority shareholder of National Broadcasting Corp. and operates 360media, which offers direct to home TV services.

MediaQuest also has pending discussions to purchase 87.5 percent of The Philippine Star for P4 billion.

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