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Television Broadcasts (TVB)

TVB shares soar after major shareholders raise buyback price

TVB shares soar almost 13 per cent to an 18-month high after the broadcaster’s major shareholders raised the per-share buyback price to HK$35.075, from HK$30.50, making it more costly for a counter offer to take over the company

PUBLISHED : Tuesday, 14 February, 2017, 6:00am
UPDATED : Tuesday, 14 February, 2017, 11:09am

TVB, Hong Kong’s main free-to-air terrestrial broadcaster, soared to an 18-month high after its controlling shareholders raised their buyback offer price to thwart an 11th hour takeover bid by a potentially hostile investor.

Shares of Television Broadcasts Limited, as TVB is also called, surged almost 13 per cent to an intraday high of HK$34.25 on the Hong Kong exchange, the highest since August 20, 2015.

The controlling shareholders of TVB, set up half a century ago by media mogul Sir Run Run Shaw, yesterday raised the per-share buyback price for acquiring stock that they don’t already own to HK$35.075, from a January 24 price of HK$30.50 each. The number of shares to be bought will be reduced to 120 million from 138 million, keeping the total consideration of the offer still at HK$4.21 billion (US$542 million).

TVB said in the filing that the revision was made to ensure that the public would control no less than 25 per cent of the total shares after the buy-back plan.

Who is the mysterious TVB buyer?

“The company is concerned over the possibility of the public float requirement under the Listing Rules being breached as a result of the previous offer. Such a concern may materialise in the remote circumstances where all major shareholders elect to retain their shares and not accept the offer, while all other shareholders elect to tender their shares in acceptance of the offer,” the filing said.

The broadcaster -- where stars including Andy Lau, Chow Yun Fatt and Stephen Chow began their careers -- is controlled by a group of shareholders that call themselves the Young Lion Holdings Ltd., with a direct stake of 26 per cent, while Mona Fong, the widow of the late Sir Run Run Shaw, holds a 3.9 per cent stake.

After the revision, Young Lion and its associates will increase their stake in TVB to 41.19 per cent from the current 29.9 per cent,. TVB said in its filing.

The new offer could be a strategy by the controlling shareholder of TVB to deter a potential acquirer.

Last Wednesday, TVB filed a notice to the Hong Kong exchange saying it had received an unsolicited offer from little-known TLG Movie and Entertainment Group.

The higher per share price could make it more costly for TLG to match the offer. A TLG executive told the South China Morning post last week that it was prepared to unveil the financial details of its offer “in a week or two”.

The offeror is not known to us. We therefore would be interested to know who are the senior management in TVB that Mr Chow has been in touch in the past 10 years
S.Y. Tam, TVB spokesman

Hong Kong-incorporated TLG is part of Beijing-based Top Legend Group, which calls itself an investor in real estate, entertainment and media.

TLG was interested in TVB’s intellectual property and had been in contact with the 49-year-old broadcaster since 2007 to discuss acquiring its trove of films, sitcoms and archival footage, TLG’s founder and chief executive Alex Chow said in a telephone interview with the South China Morning Post last Thursday.

The claim of prior contact was contested by TVB.

“As our statement said, the offeror is not known to us,” the broadcaster’s spokesman S. Y. Tam said. “We therefore would be interested to know who are the senior management in TVB that Mr Chow has been in touch in the past 10 years.” Chow declined to elaborate, saying the discussions had been proceeding during the late Shaw’s time.