Next Media was founded by high profile businessman Jimmy Lai, known for his support for democracy and criticism of China. It introduced tabloid-style journalism into Hong Kong and Taiwan, with the hugely successful Apple Daily. The group made a rare misstep by entering Taiwan’s saturated broadcasting market. In October 2012 it agreed to sell its loss-making Taiwan TV unit and to terminate its video-on-demand (VOD) services, but the deal fell through in March 2013.
Next Media to push through with Taiwan assets sale
Publisher and buyer group confident of signing a deal worth HK$4.7b this Saturday, sources say
Bien Perez and Lawrence Chung in Taipei
Media tycoon Jimmy Lai Chee-ying is expected to close the NT$17.5 billion (HK$4.7 billion) deal to sell Next Media's print and TV holdings in Taiwan as planned this Saturday, following efforts by the buyers to comply with regulatory restrictions.
According to a Next Media source involved in the negotiations, the Formosa Plastics Group will take over as controlling shareholder of the buying consortium to appease concerns raised by Taiwan's Financial Supervisory Commission.
The commission had objected to entrepreneur Jeffrey Koo Jnr, the eldest son of banking mogul and Chinatrust Financial Holding chairman Jeffrey Koo Len-song, leading that consortium because of the island's rule that bars financial institutions from investing in the media.
Shares of Next Media, in which Lai is chairman and has a 74.05 per cent stake, yesterday fell the most in two years on news of the regulator's stand against Koo. Trading of the company's shares, which dropped 12.99 per cent to HK$1.34, was suspended at 10.08 at its request.
The commission said Koo's stake had to be restricted to less than 20 per cent, according to Taiwanese media reports.
Koo last month signed a memorandum of understanding for the cash purchase of Next Media's Taiwan print and TV assets, with the backing of Formosa Plastics Group president Wang Wen-yuan and a Singapore private-equity fund.
The Next Media source said: "The signing of the deal will go ahead as scheduled on Saturday, despite reports that Koo might run into qualification problem in inking the deal."
Restrictions should not be imposed on Koo because he holds no official position or shares in Chinatrust, and serves only as chairman of its charitable foundation, the source said.
Another Next Media source said the company had confirmed that Lai adversary Tsai Eng-meng, chairman and chief executive of Taiwanese snack food-to-media conglomerate Want Want Holdings, would take a minority stake as the third member of Koo's buyer group.
This news comes as a disappointment to Lai, who said he agreed to the deal last month only after checking that Tsai, who has a pro-mainland stand, was not involved in the buyer group. "Tsai still has an ongoing lawsuit against Jimmy," the source said,
In a filing with the Hong Kong stock exchange on Monday, Next Media issued a profit warning about a net loss for the six months to September 30. The loss was due to the "write-off of certain assets and equipment", after its decision to halt operations of its multimedia division in Taiwan.
Next Media, which is the largest-listed media company in Hong Kong, posted a net loss of HK$324.017 million in the six months to September last year from HK$76.155 million in the same period in 2010.