Next Media Declines on Sale of TV Unit at Loss: Hong Kong Mover
Stock Chart for Next Media Ltd (282)
The company’s shares fell as much as 7.8 percent, headed for the biggest drop since April 2, to HK$0.83, before trading at HK$0.88 as of 11:02 a.m. in Hong Kong.
Next Media Chairman Jimmy Lai agreed to sell for NT$1.4 billion ($47 million) and will post a loss of HK$522.8 million ($67.4 million) on the proposed deal with ERA Communications Inc. Chairman Lien Tai-sheng, the company said in a statement to the Hong Kong stock exchange yesterday. An attempt to sell Lai’s print business in Taiwan collapsed last month amid concerns that the deal would give the buyers too much control of the island’s news media.
“Lai’s dream of expanding in the TV industry has been broken,” said Lo Shih-hung, an associate professor at the National Chung Cheng University’s Department of Communication in Taiwan. “His print business still has the competitive advantage.”
Lai, a Hong Kong billionaire known for his anti-Beijing stance, won programming licenses from regulators and struggled to convince cable TV operators to offer his channels.
Next Media’s shares have plunged 37 percent this year, compared with the 4.7 percent drop for Hong Kong’s benchmark Hang Seng Index.
“The proposed disposal allows the group to rationalize and focus its resources on the group’s profitable operations,” the Next Media said in the statement. Lien is buying the business and assuming loans, it said.
The Taiwan TV business’s loss widened to HK$543.4 million for the fiscal year ended March 2012, from HK$320 million a year earlier, the company said yesterday.
Next Media agreed to sell to Lien of closely held ERA Communications after proposed deals with four other businessmen fell through. The company had also in October agreed to sell the TV assets to Lien for NT$1.4 billion before the transaction was terminated in the same month.
Lai’s partial exit comes as ties between Taiwan and China reached their warmest in more than six decades, after Taiwan President Ma Ying-jeou focused on economic ties and dropped the pro-independence stance of his predecessor.
Next Media’s print publications 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.
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