Cash is preferable to scrip in the sale of Sing Pao Media to Sun Media Holdings, according to an independent financial adviser. Dao Heng Securities has advised Sing Pao minority shareholders to accept cash in lieu of shares being offered by satellite television operator Sun Media. Based on Sun Media's financial performance, recent developments and future prospects, the 'cash alternative was preferable' for Sing Pao shareholders, Dao Heng said. Sun Media in December said it would buy 55.09 per cent of newspaper and magazine publisher Sing Pao from majority shareholders for HK$92.9 million. This would be followed by a general offer for the remaining shares. The consideration would be settled by issuing 1.54 billion new shares. Sun Media said minority Sing Pao shareholders could choose to exchange their holdings on the basis of one Sing Pao share for six Sun Media shares or sell their stock at 36 HK cents per share. Dao Heng said it was Sun Media's intention to minimise its potential cash outlay, reserving funds for future business development. Sun Media reported a net loss of HK$43.35 million for the six months to September last year. Dao Heng said a 5 to 20 per cent year-on-year reduction in advertising spending in Hong Kong had put pressure on Sing Pao. The company recorded a net loss of HK$101.91 million for the nine months to December. Sing Pao's 11 directors will resign with effect from 4pm on February 25, the closing date of the general offer. The appointment of new directors would be announced at the appropriate time, Sun Media said yesterday. There has been speculation that Sun Media plans to use loss-making Sing Pao as a back-door listing vehicle. Sun Media said yesterday that it had no intention of injecting new businesses into Sing Pao or to dispose of any of its assets upon completion of the deal.