TVB Shares Fall in Hong Kong on Speculation Lee Investment to Be Limited

Television Broadcasts Ltd. fell the most in 17 months in Hong Kong trading on speculation that a potential investment by Henderson Land Development Co. Vice- Chairman Lee Ka-kit won’t trigger a wider takeover offer.

TVB, Hong Kong’s biggest TV company which resumed trading today, fell 5.8 percent, the most since April 27, 2009, to close at HK$43.80. The stock was suspended yesterday after surging 17 percent in premarket trading.

Chairman Run Run Shaw’s Shaw Holdings Inc. is in talks to sell shares in a company that owns a 26 percent stake in TVB, the broadcaster said yesterday, without identifying the prospective investors. Henderson’s Lee, son of billionaire founder Lee Shau-kee, is studying a plan to buy a stake in TVB, the property developer said yesterday.

“It appears that the negotiations are limited to a partial stake in TVB, one that’s below 30 percent, and won’t lead to a general offer for the rest of the company’s shares,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. “That’s affected the share price.”

Investors acquiring stakes exceeding 30 percent of public companies in Hong Kong are required to make bids to buy out other shareholders under local listing rules.

Henderson Investment

The possible investment in TVB by Lee Ka-kit is unrelated to Henderson Land or to unit Henderson Investment Ltd., Bonnie Ngan, a spokeswoman at the developer, said yesterday. His interest in the broadcaster is preliminary and no agreement has been reached, she said.

Henderson Investment fell 7.8 percent to 83 Hong Kong cents today, after climbing 25 percent yesterday. Henderson Land, the fourth-biggest developer in Hong Kong by market value, fell 2 percent to HK$53.75.

Shaw, 102, is the biggest shareholder in TVB with a 32.5 percent stake, comprising shares held personally and the 26 percent holding owned by Shaw Brothers (Hong Kong) Ltd. Shaw Holdings is in preliminary talks to sell shares in Shaw Brothers, TVB said yesterday.

Apart from the stake in TVB, Shaw Brothers also owns a property site in the Clearwater Bay district in Hong Kong, Morgan Stanley analyst Jenny Wu wrote in a report yesterday.

Lee’s estimated wealth of $18.5 billion ranks him as Hong Kong’s second-richest man, behind Cheung Kong (Holdings) Ltd. Chairman Li Ka-shing, according to Forbes magazine. Lee controls Henderson Land and Hong Kong and China Gas Co.

Shaw, knighted by Britain’s Queen Elizabeth II in 1977, co- founded TVB in 1967 after his Shaw Brothers became a leading local film producer. In October 2008, he abandoned talks to sell his stake in TVB because of the global recession, the broadcaster said in a filing at the time.

TVB is one of the world’s biggest producers of Chinese- language programs, with distribution in more than 30 countries, according to its website.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.