Jimmy Lai sells Next Media's Taiwan assets for US$600m
Next Media, controlled by Hong Kong mogul Jimmy Lai Chee-ying, agreed to sell its Taiwan print and television businesses to two consortia for US$601 million.
Next Media, controlled by Hong Kong mogul Jimmy Lai Chee-ying, agreed to sell its Taiwan print and television businesses to two consortia for NT$17.5 billion (US$601 million), spokesman Mark Simon said on Wednesday.
Next Media will sell its Taiwan print assets to four investors including Want Want Chinatimes Group President Tsai Shao-Chung, William Wong of the Formosa Plastics Group, Chinatrust Charity Foundation Chairman Jeffrey Koo Jr. and Lung Yen Life Service Corporation Chairman Lee Shih-tsung, Simon said.
Lai, known for criticizing the Chinese government, is exiting most of his Taiwan businesses after battling regulators for licenses and distribution rights.
The investment by Tsai, son of Want Want China Chairman Tsai Eng-meng, may raise regulatory concerns as Lai’s Apple Daily and Tsais’ China Times will have a combined newspaper market share exceeding 45 per cent, according to National Chung Cheng University’s Kuang Chung-Hsiang.
“The deal may have to obtain approval from the fair-trade commission,” Kuang, an assistant professor of communications, said before the annoucement. “The overhang is there.”
Lee Tai-hung, chairman of Taiwan Fire & Marine Insurance, replaces Tsai in the group buying the television assets, Simon said. The pacts were signed at around 11:50pm in Macau on Tuesday, Simon said.
An official announcement, including details of each transaction, will be released later on Wednesday, Simon said. Apple Daily Taiwan, a Next Media publication, reported the agreements earlier on Wednesday, which Simon confirmed.
Next Media, which suffered two annual losses due in part to its Taiwan television and multimedia unit, said on November 12 it will post a substantial loss for the six months ended September. The Tsais’ China Times Group controls newspapers and TV channels.
The younger Tsai is also a director of Asia Television and serves on the Taiwan government’s Straits Exchange Foundation. His father was in July granted conditional approval to buy Taiwan cable-television operator China Network Systems for US$2.4 billion after regulators asked for guarantees of independence from mainland China interests.
Taiwan has been ruled separately from China since 1949 when members of the Kuomingtang party fled to the island after losing a civil war with Communist forces. Relations between Taiwan and China reached their warmest in more than six decades as Taiwan President Ma Ying-jeou focused on economic ties and dropped the pro-independence stance of his predecessor.
“The deal would be a disaster for democracy in Taiwan,” opposition Democratic Progressive Party spokesman Lin Chun-hsien said in a statement on November 26. “The monopolization of media and shadow of China will hurt freedom of the press and free speech.”
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 October 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.
William Wong is chairman of Formosa Plastics Group, Taiwan’s biggest diversified industrial conglomerate with businesses making products ranging from semiconductors to detergents.
The group took in nearly US$80 billion in sales in 2011, and its listed entities include Formosa Plastics, Formosa Chemicals & Fibre, Formosa Petrochemical and Nan Ya Plastics.
Lee Tai-hung’s Taiwan Fire & Marine posted a 25 per cent decline in net income last year to NT$700.6 million, according to Bloomberg data. Lee Shih-tsung heads a funeral business that reported US$63 million of net income last year.
Chinatrust Charity Foundation chairman Jeffrey Koo Jr is the son of Chinatrust Financial Chairman Jeffrey Koo. The company is the fourth-biggest listed financial company in Taiwan by market capitalization. His appeal against an insider trading conviction for misusing Chinatrust Financial funds to buy a stake in Taiwan’s Mega Financial Holding is pending.
Next Media is suspended in Hong Kong trading today. The stock jumped 41 per cent on October 18 after an initial agreement with Koo was announced.
Lai will retain own 70 per cent of Taipei-based Next Media Animation, with Next Media holding 30 per cent, Simon said. Next Media’s Taiwan operations accounted for about 42 per cent of its 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 (US$151 million) last fiscal year from HK$459 million a year earlier, according to its annual report.
