Want Want-Led Group to Acquire China Network From MBK
Want Want Group (151), the conglomerate with businesses from broadcasting to food, said it’s leading an investment group that agreed to buy Taiwanese cable-television operator China Network Systems Co. from MBK Partners Ltd.
Chao Yu Pei, special assistant to Want Want’s president, said the group signed the agreement yesterday, declining to provide financial details. The investors agreed to buy closely held China Network’s stock for about $1.4 billion and assume $1 billion of debt, said a person familiar with the matter, asking not to be identified because the accord is confidential.
The purchase would allow Want Want Chairman Tsai Eng Meng, whose food business includes rice cakes and flavored milk, to expand his media assets in a market where almost 80 percent of homes tune in to cable TV. For MBK, the sale would help the private equity fund, founded by former Carlyle Group executives, collect more than double the $600 million it spent buying China Network’s stock more than three years ago.
“If Want Want has media outlets covering the entire Greater China, companies who want to buy advertisements can do it cost-effectively,” said Monika Yang, who helps oversee almost $2 billion at Hamon Asset Management Ltd. in Hong Kong. “They are already very successful in the consumer front.”
Want Want outbid Permira Advisers LLP, which teamed up with Taiwan’s Ruentex Group, Macquarie Group Ltd. (MQG) and Bain Capital LLC, the person said. Choosing a Taiwanese buyer will help obtain regulatory approval, according to the person.
Want Want China Holdings Ltd., the Hong Kong-listed unit, advanced 0.4 percent to HK$7.12 as of 2:59 p.m. local time.
The sale comes as Taiwan’s Daniel and Richard Tsai, who are unrelated to the Want Want chairman, seek to clear regulatory approval to buy Kbro Co., the island’s top cable TV operator, from Carlyle Group.
Taiwan’s communications regulator said Oct. 6 it will seek opinions from the public, academics and experts before deciding whether to approve the Tsai family’s purchase of Kbro Co.
Michael Kim, an MBK founding partner, wasn’t immediately reachable on his mobile phone. MBK, which bought China Network with Taiwan’s Koo’s family, effectively controls the cable-TV operator through a preference-share arrangement with the local partner, people familiar with the plan said in August.
Want Want’s Tsai bought a stake in Hong Kong’s Asia Television last year and acquired Taiwan’s China Times Group, owner of at least two newspapers and three TV channels on the island, in 2008.
China Network had 1.05 million subscribers at the end of 2009, giving it a 21 percent market share of Taiwan’s cable-TV market, while Kbro Co. had a 22 percent share with 1.11 million customers, according to a July report from Taiwan’s National Communications Commission.