TVB shares rise as court ruling bolsters chance for Chinese mogul to wrest control of broadcaster
Shares of Television Broadcasts, Hong Kong’s dominant free-to-air broadcaster, soared when they resumed trading on Monday after the Court of First Instance quashed a ruling by the city’s securities watchdog that gave all its shareholders equal rights to vote on a proposed share buy-back.
TVB shares jumped as much as 6.4 per cent to an intraday high of HK$28.10, the highest intraday level since August 18.
The court last Wednesday ruled in favour of TVB, which sought a judicial review of an earlier ruling by the Securities and Futures Commission, that each share should count for one vote in the impending shareholders’ meeting to vote on the shares buy-back proposal.
The court ruled that the appropriate clauses of the Broadcasting Ordinance should apply when it came to the waiver.
Under the ordinance, the votes of non-Hong Kong investors should be capped at 49 per cent, TVB argued in the judiciary review.
The court ruling meant Young Lion Holdings, controlled by mainland media mogul Li Ruigang, has a better chance of winning shareholders’ approval for the proposal.
This is because following the ruling, the votes of non-Hong Kong based shareholders will be capped at 49 per cent of votes cast, potentially reducing the weight of their “No” votes.
TVB’s second-largest shareholder, London-based investment fund Silchester International Investors, has indicated it will vote against the buy-back.
In January, TVB announced an offer to buy back 138 million shares at HK$30.50 each, or 31.51 per cent of the company, from shareholders for HK$4.2 billion. The offer was later revised to 120 million shares at HK$35.075 each, or 29.9 per cent of the firm.
Young Lion said it would not take up the offer. Li’s stake in the broadcaster could rise to 41.19 per cent after the offer.
TVB said in Sunday’s filing that it will make a request to the commission for an extension of a deadline for the dispatch of a shareholders circular detailing the terms and conditions of the buy-back.
TVB closed at HK$26.4 on Tuesday before the trading halt.