TVB offers HK$4.21 billion in share buy-back

Television Broadcasts plans to buy back up to 138 million of its shares for HK$4.21 billion in a transaction that could raise the stake held by its biggest group of shareholders to more than 40 per cent, which would trigger a mandatory general offer for all the shares they do not own.

In its filing to the Hong Kong stock exchange on Tuesday, TVB said financial adviser Bank of America Merrill Lynch would make the cash offer of HK$30.50 per share on its behalf.

That represented a 14.7 per cent premium to the stock’s closing price of HK$26.60 on Tuesday.

The city’s premier free-to-air terrestrial television broadcaster said Young Lion Holdings, which owns 113.9 million shares and leads the Young Lion Concert Party Group of shareholders, had confirmed it had no intention to accept the offer for any of the shares it held directly or indirectly.

As such, TVB said Young Lion Concert Party’s stake might increase to 43.66 per cent at the close of the offer from the current 29.9 per cent.

The company said its enlarged shareholding would trigger “an obligation on Young Lion Concert Party under Rule 26 of the Takeovers Code to make a mandatory general offer for all the shares not already owned by the group”.

“Consequently, an application will be made to the executive by the company on behalf of Young Lion Concert Party for the whitewash waiver,” it said.

According to TVB, that waiver is to be granted by the executive director of the corporate finance division of the Securities and Futures Commission.

It said the proposed buy-back of 31.51 per cent of its share capital, subject to approval by independent shareholders, provided an opportunity to use its existing cash “to enhance shareholder value”.

Last month, TVB issued a profit warning for last year amid the lingering economic slowdown in Hong Kong, the costs of covering the Rio Olympic Games and start-up losses at its over-the-top service.

The broadcaster estimated its net profit last year would slide 55 to 65 per cent, based on the preliminary assessment of its unaudited management accounts for the 10 months to October.

In 2015, TVB recorded a 6 per cent decrease in net profit to HK$1.33 billion from a year earlier.