Billionaire Li Ka-shing's Tom.com Ltd is in talks to form a music venture in China with GMM Grammy Pcl, Thailand's biggest music-recording company, according to Grammy Chairman Paiboon Damrongchaitham.
"We would like to expand into the mainland market," said Paiboon in an interview while traveling to Hong Kong. "And Tom has a media distribution network in China."
Tom.com, which started as a Web site operator, is expanding into traditional media and advertising to counter losses in online venturesShell bids to sell LNG to Taiwan from Sakhalin fields.
In March, the company bought half of Chinese film and music distributor Hong Xiang Audio-Video Co for US$15 million, its first move into China's entertainment market.
"Although I don't see an immediate contribution for Tom.com, from an investor's point of view, this is a pretty comforting move as doing media in China is a persistent strategy for Tom.com," said Renee Hung, who helps manage US$500 million at Value Partners Ltd in Hong Kong.
Paiboon said he had previously met Tom.com executives in Bangkok and would hold further talks yesterday with the Hong Kong-based company. GMM will invest not more than 400 million baht (US$9.4 million) into the China venture.
"The piracy issue in China is better now," Paiboon said. "It's a good time to go in. We will be setting up business in Beijing, Shanghai an Guangzhou."
Separately, Paiboon denied a Hong Kong Economic Times report citing unidentified people saying the Thai company is in talks to sell its unprofitable Taiwan operation to Tom.com for US$25 million.
"This is not true at all because in Taiwan our business can control the loss," Paiboon said. "We are now looking for a strategic partner to join, but not an investor."
In November, Grammy said it plans to sell part of the Taiwan business, almost fours years after buying it. Grammy will also be talking to three other prospective partners about the venture in China. Paiboon declined to identify them.
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