Jimmy Lai to sell HK$783m worth of Next Media shares

Apple Daily chief's sale of 7.5pc stake to meet regulatory public float requirement

Media mogul Jimmy Lai Chee-ying is selling as much as HK$783 million worth of shares in Apple Daily publisher Next Media to comply with stock exchange rules governing the amount of stock in listed companies that must be freely tradable, a source said.

The sale was prompted by Mr Lai's planned conversion of preference shares into ordinary stock that would have taken his ownership stake above 75 per cent. Under exchange regulations, at least 25 per cent of the shares in listed companies must be freely tradable.

Under the deal, a key shareholder of Next Media, which a source close to the deal identified as Mr Lai, was offering to sell a 7.5 per cent stake in Next Media, or 180 million existing shares, for between HK$4.15 and HK4.35 each after the market close, according to the term sheet sent to fund managers.

The price represents a discount of 2 to 6.5 per cent to Next Media's closing price yesterday of HK$4.44. The shares sold will be subject to a six-month lock-up period, the term sheet said.

CLSA Asia is handling the sale.

According to Next Media's annual report, Mr Lai owns 65.61 per cent of the company he founded in 1990. He also holds 920 million preference shares convertible into common stock. The conversion option expires on October 26. Under the listing rules, a company must maintain a minimum public float of 25 per cent of the shares outstanding.