Jimmy Lai Sells Embattled Taiwan News Media for $600 Million
Next Media Ltd. (282), the sensationalist Hong Kong publisher controlled by Jimmy Lai, plans to sell its Taiwan news businesses for NT$17.5 billion ($600 million) after losses at its television unit. Shares surged.
Next Media signed a memorandum of understanding to sell its print and television operations to Jeffrey Koo Jr., according to a filing to the Hong Kong stock exchange yesterday. Koo is the eldest son of Chinatrust Financial Holding Co. founder and Chairman Jeffrey Koo Sr.
The sale marks the exit of the Hong Kong mogul, known for criticizing the Chinese government, from Taiwanese media as business and political ties improve between the island and China. Lai’s foray into Taiwan’s television industry in 2010 led to two straight annual losses for Next Media as the company battled regulators for licenses and distribution rights.
“The TV business has been a real thorn because of regulatory obstacles and then a big barrier to distribution,” said Vivek Couto, the Hong Kong-based executive director of Media Partners Asia, an industry consultant. “Established modes of delivery were denied to Next.”
Shares of Next Media surged 41 percent, the most since 2001, to close at HK$1.58 in Hong Kong. Next Media has nearly tripled since it announced plans to sell its Taiwan assets on Sept. 4.
Taiwan has been ruled separately from China since 1949 when members of the Kuomingtang party fled to the island after a civil war with Communist forces. Relations between Taiwan and China reached their warmest in more than six decades after Taiwan President Ma Ying-jeou took office in May 2008. He focused on economic ties and dropped the pro-independence stance of his predecessor.
“We care about press freedom in Taiwan,” said Mark Simon, a Next Media spokesman. “There’s a debate going on about whether Taiwan is being taken over by mainland interests buying the media companies.”
Chinatrust Financial’s Shanghai branch in September won approval to be involved in China’s interbank foreign exchange market. It owns Chinatrust Commercial Bank, which is the island’s biggest credit card issuer. Jeffrey Koo Jr. yesterday declined to comment.
“Taiwan loses an independent media that can be a watchdog of the government and gets another one controlled by a pro-China business family,” said Kuang Chung-Hsiang, an assistant professor of communications at the National Chung Cheng University in Taiwan.
“This land is your land, you have to keep fighting for it,” Lai said Oct. 16 in a Next TV video clip posted on its website showing him saying goodbye to employees in Taipei. “I can’t hold out here anymore. I tried and I failed.”
Lai declined to comment on the sale today in an e-mail, and said he’s taking “a trip for pleasure.”
Next Media will need to enter into formal agreements for the sale, with the targeted completion date in December, according to the statement.
Selling the assets will allow the company to focus on operations in Hong Kong, its biggest market, and the development of its digital content, Next Media said. The agreement includes the sale of its print business, which publishes the Taiwan editions of Apple Daily and Next Magazine, for NT$16 billion. The television business will be sold for NT$1.5 billion, according to the statement.
The Taiwan operations accounted for about 43 percent of Next Media’s 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.
Lai started the Taiwan version of Next magazine in 2001, followed by Apple Daily, which became the largest newspaper on the island. The daily is known for celebrity gossip and graphic depictions of violent crimes.
“Taiwan’s cable operators don’t like him because his media business has caused coverage in Taiwan to be more sensational,” said Alice Yang, a professor at the Cheung Kong School of Journalism and Communication at Shantou University, referring to Lai’s difficulties in securing distribution.
Apple Daily and Next magazine are banned in mainland China because of their anti-Beijing political stance. In 1994, Lai referred to then-Chinese premier Li Peng as a “turtle egg” in an editorial about the leader’s role in the suppression of student protests at Tiananmen in 1989.
Hong Kong’s Apple Daily in 2003 published a full-page banner urging the resignation of the city’s Beijing-backed former Chief Executive Tung Chee-Hwa.
Lai said in 2007 his company suffered advertising losses of about HK$200 million a year after some Hong Kong companies boycotted his publications.
To contact the editor responsible for this story: Michael Tighe at email@example.com