MANILA (Reuters) -Philippine broadcaster ABS-CBN Corp said on Thursday it has terminated a deal to acquire a minority stake in local operator TV5 Network Inc, weeks after some lawmakers questioned the legality of the plan.
ABS-CBN, which has been broadcasting content mostly online since losing its rights to operate radio and television frequencies in 2020, gave no reason for the scrapping of the deal, which it said was a mutual decision.
The termination follows concern from some legislators at an inquiry last week that TV5 could be violating its franchise if it went ahead with the plan to sell a 35% stake to ABS-CBN for 2.16 billion pesos ($38.3 million).
“The parties confirmed that they have not implemented any of the transactions covered by the investment agreement,” ABS-CBN said in a statement.
The deal could have allowed ABS-CBN to show some of its programmes to a wider audience through TV5’s free-to-air channels. ABS-CBN has said such channels remain the best source of entertainment and public service to Filipinos.
ABS-CBN shares sank nearly 12% to a one-month low upon resumption of trading after a one-hour halt on Thursday. The broader stock index was up 0.19%.
ABS-CBN lost its congressional broadcast franchise in 2020 and was among several media groups hit by legal or licensing problems after angering former President Rodrigo Duterte.
Prior to that, it was the country’s biggest broadcaster, with a reach of up to 55 million people domestically and millions more Filipinos overseas.
The two firms also dropped a deal for TV5’s cable unit to acquire a 38.88% equity interest in ABS-CBN’s Sky Cable Corp.
($1 = 56.35 Philippine pesos)
(Reporting by Neil Jerome Morales; Editing by Martin Petty)