Tycoons Buy Next Media’s Taiwan Assets for NT$17.5 Billion
Stock Chart for Next Media Ltd (282)
Next Media Ltd. (282), controlled by Hong Kong mogul Jimmy Lai, agreed to sell its Taiwan print and television businesses to two consortia for NT$17.5 billion ($601 million), spokesman Mark Simon said.
Next Media will sell its Taiwan print assets to four investors including Want Want Chinatimes Group President Tsai Shao-Chung, William Wong of the Formosa Plastics Group, Chinatrust Charity Foundation Chairman Jeffrey Koo Jr. and Lung Yen Life Service Corp. (5530) Chairman Lee Shih-tsung, Simon said.
Lai, known for criticizing the Chinese government, is exiting most of his Taiwan businesses after battling regulators for licenses and distribution rights. The investment by Tsai, son of Want Want China Holdings Ltd. (151) Chairman Tsai Eng-meng, may raise regulatory concerns as Lai’s Apple Daily and the Tsais’ China Times will have a combined newspaper market share exceeding 45 percent, according to National Chung Cheng University’s Kuang Chung-Hsiang.
“The deal may have to obtain approval from the fair-trade commission,” Kuang, an assistant professor of communications, said before the announcement. “The overhang is there.”
Taiwan’s Fair Trade Commission, which hadn’t received a submission, said today it will hold a public hearing tomorrow.
Lee Tai-hung, chairman of Taiwan Fire & Marine Insurance Co. (2832), replaces Tsai in the group buying the television assets, Simon said. The pacts were signed yesterday, he said.
Taiwan Fire & Marine and Lung Yen said today in separate statements to the Taiwan stock exchange that the investments were by their chairmen and doesn’t involve the companies.
Formosa Plastics Corp. said in a filing that the investment by an affiliate will provide diversified and fair channels for the expression of opinions. Chinatrust Charity Foundation didn’t respond to an emailed request for comment. Tsai Shao-Chung didn’t answer calls to his office at Want Want Chinatimes.
An official announcement, including details of each transaction, will be released later today, Simon said. Apple Daily Taiwan, a Next Media publication, reported the agreements earlier today, which Simon confirmed.
Next Media, which suffered two annual losses due in part to its Taiwan television and multimedia unit, said on Nov. 12 it will post a substantial loss for the six months ended September. The Tsais’ China Times Group controls newspapers and TV channels.
The younger Tsai is also a director of Asia Television Ltd. and serves on the Taiwan government’s Straits Exchange Foundation. His father was in July granted conditional approval to buy Taiwan cable-television operator China Network Systems Co. for $2.4 billion after regulators asked for guarantees of independence from mainland China interests.
Taiwan has been ruled separately from China since 1949 when members of the Kuomingtang party fled to the island after losing a civil war with Communist forces. Relations between Taiwan and China reached their warmest in more than six decades as Taiwan President Ma Ying-jeou focused on economic ties and dropped the pro-independence stance of his predecessor.
“The deal would be a disaster for democracy in Taiwan,” opposition Democratic Progressive Party spokesman Lin Chun-hsien said in a statement on Nov. 26. “The monopolization of media and shadow of China will hurt freedom of the press and free speech.”
Next Media’s Apple Daily and Next Magazine are banned in mainland China because of their anti-Beijing stance. Lai started the Taiwan version of Next magazine in 2001, followed by Apple Daily, known for celebrity gossip and graphic depictions of violent crimes.
Lai said in a video clip posted on Next TV on Oct. 16 that he had failed in Taiwan. His exit comes as business and political ties improved between the island and China after Taiwan President Ma took office in May 2008.
William Wong is chairman of Formosa Plastics Group (1301), Taiwan’s biggest diversified industrial conglomerate with businesses making products ranging from semiconductors to detergents. The group took in nearly $80 billion in sales in 2011, and its listed entities include Formosa Plastics Corp., Formosa Chemicals & Fibre Corp., Formosa Petrochemical Corp and Nan Ya Plastics Corp.
Lee Tai-hung’s Taiwan Fire & Marine posted a 25 percent decline in net income last year to NT$700.6 million, according to data compiled by Bloomberg. Lee Shih-tsung heads a funeral business that reported $63 million of net income last year.
Chinatrust Charity chairman Jeffrey Koo Jr is the son of Chinatrust Financial Holding Co. Chairman Jeffrey Koo. The company is the fourth-biggest listed financial company in Taiwan by market capitalization. His appeal against an insider trading conviction for misusing Chinatrust Financial funds to buy a stake in Taiwan’s Mega Financial Holding Co. is pending.
Next Media is suspended in Hong Kong trading today. The stock jumped 41 percent on Oct. 18 after an initial agreement with Koo was announced.
Lai will retain own 70 percent of Taipei-based Next Media Animation, with Next Media holding 30 percent, Simon said. Next Media’s Taiwan operations accounted for 42 percent of its sales for the year ended March 2012, its second-biggest market after Hong Kong.
Losses at its Taiwan television and multimedia unit widened to HK$1.17 billion ($151 million) last fiscal year from HK$459 million a year earlier, according to its annual report.
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