Next Media Suspends Trading Ahead of Taiwan Sale DeadlineDebra Mao and Lulu Yilun Chen
Next Media Ltd., controlled by billionaire Jimmy Lai, suspended trading in Hong Kong today a day ahead of the deadline to complete the NT$17.5 billion ($586 million) sale of its Taiwan print and TV assets.
The deal may fall through because Want Want China Holdings Ltd. Chairman Tsai Eng-meng, whose son is one of the buyers for Next Media’s Taiwan print business, is aiming to pare the stake purchase to avoid antitrust queries into the family’s media ownership, the Taipei-based Economic Daily News reported today.
The latest sales agreement marks Lai’s third attempt to divest most of his Taiwan assets after losses at his television business dragged down Next Media’s earnings. The Tsai family's China Times Group controls newspapers and TV channels, and they are one of four investors that agreed in November to buy Next Media’s print business.
Trading will be suspended “pending the issue of an announcement,” Next Media said today in its statement. Spokesman Mark Simon couldn’t immediately comment.
Next Media’s shares have plunged 16 percent this year, compared with the 1.8 percent decline on Hong Kong’s benchmark Hang Seng Index.
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, raising regulatory concerns. The elder Tsai’s $2.4 billion purchase of cable operator China Network Systems Co. is still subject to approval from Taiwan’s broadcast regulator, which said Feb. 21 the purchaser hadn’t fulfilled its conditions.
Calls to Want Want China Times President Tsai Shao-Chung’s office went unanswered today.
Protesters against the administration of Taiwan President Ma Ying-jeou in January called on regulators, including the Fair Trade Commission and the National Communications Commission, to block the sale of Next Media’s Taiwan assets to prevent the concentration of media interests.
The other buyers for Next Media’s print assets are William Wong of the Formosa Plastics Group, Chinatrust Charity Foundation Chairman Jeffrey Koo Jr. and Lung Yen Life Service Corp. Chairman Li Shih-tsung. Next Media said it would dispose of the print business for NT$16 billion, with Wong’s company taking a 34 percent stake, Tsai’s 32 percent, Koo’s 20 percent and a company controlled by Li taking 14 percent.
The buyers had four months from the Nov. 27 date of the purchase agreement to complete the transaction, according to a Next Media statement on Dec. 12. Both buyers and seller have the right to extend the deadline.
Another consortium will purchase the Taiwan television assets for NT$1.5 billion, the company said.
Next Media booked two annual losses due in part to its Taiwan television and multimedia unit. The company in December said it expects to book a HK$2.28 billion ($295 million) gain on the disposals, and plans to distribute some of the proceeds as dividends.
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.