Shares in Television Broadcasts saw their biggest drop in 17 months yesterday as investors digested news that 102-year-old Sir Run Run Shaw would sell his stake in the broadcaster he co-founded more than 40 years ago.
Shares in the city's biggest free-to-air broadcaster dived as much as 11.8 per cent before closing with a loss of 5.8 per cent at HK$43.80 on concern about the company's future after Shaw.
The stock surged 16.8 per cent before its suspension on Monday on speculation Henderson Land Development vice-chairman Peter Lee Ka-kit, the elder son of billionaire founder Lee Shau-kee, was planning to buy the stake.
Shanghai Media Group (SMG), the mainland's second-largest media company, is also reportedly eyeing the broadcaster, partly because of TVB's lucrative production of Chinese television programmes.
The broadcaster has confirmed that Shaw Holdings, owned by the family of Shaw, is in talks regarding a possible sale of shares.
Peter Lee had earlier confirmed he was studying a plan to buy a stake in TVB. TVB, one of the world's biggest distributors of Chinese-language television programmes, has operations in more than 30 countries. Its Taiwan branch, TVBS, saw revenue of HK$347 million in the first half of this year, an increase of 16 per cent from a year earlier.
For SMG, acquiring a controlling stake in TVB would give it access to the Taiwan market. Following the signing of the economic co-operation framework agreement between Taiwan and the mainland, there has been speculation the mainland will attempt to acquire media companies on the island.