Oct. 3 (Bloomberg) -- Next Media Ltd., the Hong Kong publisher controlled by Jimmy Lai, reached an agreement to sell its unprofitable Taiwan TV business to the chairman of rival ERA TV for NT$1.4 billion ($48 million).
Next signed a non-binding agreement to sell Next TV Broadcasting Ltd. to Lien Tai-sheng, according to a Hong Kong stock exchange filing dated Oct. 1 and released yesterday. Lien is chairman of closely held Taipei-based ERA Communications Inc., operator of ERA TV.
A sale, to include closing Next’s video-on-demand Internet service, comes after two consecutive annual losses caused by the unprofitable move into TV broadcasting. Next, known for its animations depicting news including Tiger Woods’s car accident and Conan O’Brien’s television career, lost HK$1.17 billion ($151 million) at its TV and multimedia unit for the year ended March 31, according to its annual report.
“The possible transaction allows the group to rationalize and focus its resources on profitable operations, which should in turn enable the group to improve overall business performance,” Next said in yesterday’s filing.
Services at its video-on-demand operations will cease Oct. 31, Next said yesterday.
Lien paid a deposit of NT$140 million that may be forfeited if he and Next can’t reach a formal agreement by Oct. 21, Next said yesterday. The deadline can be extended on the agreement of both parties. The statement identifies Lien as the purchaser and doesn’t mention his company.
Daniel Chang, a spokesman for Next Media Group in Taipei, said on Oct. 1 that the deal will take effect Jan. 1 if a formal contract is inked.
Next Media, which posted revenue growth the past two years, entered the TV business three years ago and battled with Taiwan authorities to secure licenses for its news and entertainment channels.
On Sept. 4, the company said it was in early talks to sell its Taiwan assets, including Next Magazine, Apple Daily and Taiwan Sharp Daily.
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