TVE (Holdings) shareholders are being advised not to accept an offer for shares in the company from the South China Morning Post (Holdings). Substantial TVE shareholder Shaw Brothers (Hong Kong), with 30.3 per cent of the company, said it did not currently intend to accept the SCMP offer. Last month SCMP launched a $1.15 billion takeover bid for TVE in an offer of one SCMP share for two TVE shares. The SCMP shares were valued at $5.49, on February 9, and the TVE share was valued at $2.745. Robert Kuok, who is chairman of SCMP, has a 34.9 per cent interest in both companies. TVE said last night an independent committee advised by Deutsche Morgan Grenfell is sending out a response to TVE shareholders saying the offer for TVE shares is not fair and reasonable. At the time of the takeover announcement, SCMP said: 'The directors believe that there are potential synergies between some of TVE's operations and SCMP's existing business.' A response document relating to the work of the TVE independent committee to advise independent shareholders was due to be sent out to shareholders today. TVE said last night the response document points out SCMP shares out-performed the Hang Seng Index in the period immediately leading up to the date of the announcement of the offer on February 13. The closing price of the shares on February 9, the last full day of trading of SCMP shares before the offer, at $5.55, was the highest closing price of the shares since listing in 1990, TVE said. Deutsche Morgan Grenfell said it questioned the ability of the share price to be sustained at this level. This was because of the prospect of some selling of SCMP shares by Mr Kuok on undertaking the takeover to avoid triggering a mandatory takeover. Intangible assets at TVE, including audio-visual interests, had been independently valued at $542.3 million at February 29. TVE's property interests had been independently valued at $776.5 million on the same date. TVE's pro forma adjusted consolidated net asset value was said to be $1.39 billion, or $3.314 per TVE share. The value of the SCMP offer for TVE shares based on the close of the shares on March 11 was said to be at a 20 per cent discount to the pro forma value per share. TVE said its group has a business enterprise value of $1.34 billion, or $3.40 a share. This placed the SCMP offer at a 16.9 per cent discount to the enterprise value on the basis of the close of TVE shares on March 11. TVE said that according to Deutsche Morgan Grenfell, a TVE shareholder accepting the SCMP offer would receive 90 per cent of the value of his interest in the net assets of the TVE group, not 167.6 per cent as set out in the circular to SCMP shareholders last month. TVE said that as SCMP published in the English language and TVE publications are in the Chinese language, it (TVE) considered there were few real synergies between the two businesses, if any. TVE said SCMP's only substantial recent experience with Chinese language publishing was in relation to the Wah Kiu Yat Po newspaper. The paper was acquired in 1991 and SCMP disposed of a majority interest in 1994 following losses. TVE said it had synergies with TVB Group and Shaw Group and some of them would be adversely affected after an SCMP takeover.