ABS-CBN Shares Halted as Philippine TV Giant Loses Franchise Bid
(Bloomberg) -- ABS-CBN Corp. shares were halted by the Philippine Stock Exchange on Monday after lawmakers rejected the bid of the nation’s biggest media company for a new 25-year franchise.
Trading in ABS-CBN’s common shares and Philippine depositary receipts is suspended and will be lifted one day after the company’s full disclosure to the public, the exchange said on its website. ABS-CBN’s shutdown of its free television and radio since May 5 to comply with a government order has affected 11,000 employees, and has cost the network as much as 35 million pesos ($707,000) in daily advertising sales, it said.
A House of Representatives committee on Friday adopted a sub-group’s recommendation to deny ABS-CBN’s franchise renewal application. Shares of the company have slumped 16% since May 5. ABS-CBN closed 2.6% lower on Friday while its depositary shares sank 7.9%.
“The non renewal of the franchise will cause the stock to collapse,” AP Securities Inc. analyst Rachelle Cruz said. “While ABS-CBN has been doing the transition to digital, this is still a very small part of the business and will take time to build up. The main revenue of traditional media is ads.”
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