Eastern Multimedia stake up for grabs

Eastern Multimedia Co (東森媒體科技), a leading cable television service provider, confirmed yesterday that it is in talks with several interested buyers and may sell a stake in the company in the near future.

Eastern Multimedia has about 1.05 million customers, which make up nearly one-quarter of the nation's cable TV market of about 4.4 million subscribers.

"We are in talks with a number of foreign and local companies, including media operators and investment banks, and are considering either a share sale or a strategic alliance at the moment," Eastern Multimedia spokesman Chen Cheng-yi (陳正毅) said in a phone interview yesterday.

The company is open to any possibilities, said Chen, who declined to name the interested parties, citing confidentiality agreements.

Chen made the remarks after the Chinese-language Economic Daily reported yesterday that Eastern Multimedia will close a deal with Liberty Media Corp this week.

51-percent stake

The Economic Daily report said that the US media group planned to buy a 51-percent stake in Eastern Multimedia, a 25-percent stake in Eastern Broadcasting Co (東森電視), which produces news and entertainment channels, and a 40-percent stake in Eastern Home Shopping Network (東森得易購), which produces shopping channels, in a NT$20 billion (US$61.59 million) package deal.

"We need to leverage foreign companies' expertise, experience and capital to internationalize our media business in light of the local market's limited growth potential," Chen said.

Eastern Multimedia could provide a gateway for foreign companies to break into the huge Chinese-language media market, Chen said. An alliance could equip both sides with the wherewithal to tap into the China market once the Chinese authorities relax media controls, he added.

Eastern Multimedia Group chairman Gary Wang (王令麟), who reportedly met with Liberty Media chairman John Malone, told local press last month that the deal would be closed by the middle of this month.

Potential buyers

Apart from Liberty Media, other companies reportedly interested in buying the local cable TV service provider include the Carlyle Group, a US-based private equity firm, Newbridge Capital Group, an investment firm, the Macquarie Group, an Australian investment bank, and the Fubon Group (富邦集團), a Taipei-based financial services-centric firm.

Taiwan is the third largest cable TV market in Asia, after China and South Korea, and its stable yields have attracted overseas buyers.

Macquarie Bank Ltd, Australia's biggest investment bank, and its media arm, Macquarie Media Group, Australia's biggest commercial radio operator, collectively bought Taiwan Broadband Communications (台灣寬頻) for US$890 million from the Carlyle Group in December last year, a deal that gave the Australian companies a 12-percent share of Taiwan's cable TV sector.

The takeover also boosted Macquarie Media's earnings and cash flow, according to the company.