Minority shareholder urges TVB to cancel its buy-back offer

Silchester International, a London-based fund owning 14.1 per cent of TVB, urges the broadcaster to cancel its buy-back offer and pay a special dividend

PUBLISHED : Thursday, 11 May, 2017, 9:38pm
UPDATED : Thursday, 11 May, 2017, 9:38pm

Silchester International Investors LLP, a London-based fund which owns 14.1 per cent of Hong Kong’s Television Broadcasts (TVB), has reiterated its demand that the free-to-air television broadcaster should cancel its buy-back offer and pay a special dividend to minority shareholders after a ruling by the Securities Futures Commission (SFC).

“The steps that the [SFC] panel has taken to protect minority shareholders in TVB, and shareholders in Hong Kong companies more generally, help to preserve Hong Kong’s reputation in the financial markets,” said Tim Linehan, senior partner at Silchester.

In the ruling issued by the SFC, the regulator said a whitewash wavier should be granted subject to conditions.

TVB applied for the wavier so that its majority shareholder Young Lion could be exempt from making a general offer to buy the outstanding shares in the company.

The SFC also said the waiver should not be put before TVB shareholders for a separate vote on the offer.

Chinese media magnate Li Ruigang revealed as largest shareholder in Hong Kong’s TVB

In January TVB offered to buy back 31.51 per cent of the company’s shares for HK$4.21 billion.

“The buyback is untenable and should be cancelled,” said Linehan in an email to the South China Morning Post.

TVB previously expressed an interest “to utilise its existing cash to enhance shareholder value”, he said. He urged TVB to pay a special dividend.

In February, Silchester said the easiest and most efficient way for TVB to return this cash to shareholders would be to pay a special dividend of HK$9.60 per share.

“A special dividend would benefit all shareholders equally,” Linehan said in the email.

A spokesperson for TVB said the company would make an announcement in response to the SFC ruling as soon as possible.

In the ruling report submitted to SFC on May 10, TVB disclosed that Chinese media magnate Li Ruigang ultimately holds about a 20 per cent stake in TVB, making him the single largest shareholder.