Taiwan Optical Platform Co (台灣數位光訊) plans to acquire a smaller cable TV operator for NT$7.25 billion (US$233.3 million) to help expand its customer base as competition with Internet content providers intensifies, the company said yesterday.
The Taichung-based company signed a share purchase agreement with Kaiyueh Investment Co (凱月投資) to fully acquire Te Rui Co (得濬) after obtaining approval from its board of directors earlier yesterday, it said.
Te Rui owns two smaller cable TV operators in Tainan and Chiayi County, as well as a multimedia company, which last year received approval from the National Communications Commission (NCC) to create a shopping channel.
The acquisition would help Taiwan Optical, the nation’s No. 5 cable TV operator, narrow its gap with its closest rival, TFN Media Co (台固媒體), which as of March 31 had 555,512 customers, or an 11 percent market share, NCC statistics showed.
Upon completion of the deal, Taiwan Optical would see its cable TV subscribers jump to 466,000, compared with 283,000 currently, while its market share would increase to 9.24 percent from 5.6 percent, the figures showed.
The deal “will play a crucial part in the company’s development as it seeks to expand its customer base and fiber optic coverage,” Taiwan Optical financial division director Sandy Lin (林淑鈴) told a media briefing in Taipei.
“The company will have stronger bargaining power when negotiating for a better deal in equipment sourcing and channel leasing or purchases, as the acquisition will boost the company’s operations to an economic scale,” Lin said.
The company also expects the acquisition to help expand its fixed-line businesses — the firm’s new focus — to Tainan and Chiayi from central and northern Taiwan, she said.
The two cable TV operators owned by Te Rui have 40,000 broadband subscribers and have secured 5 percent fiber-optic coverage nationwide, Lin said.
Kaiyueh Investment is the biggest shareholder of Taiwan Optical with a 14 percent stake, but Te Rui and Taiwan Optical would operate independently, she said.
Taiwan Optical is to hold an extraordinary shareholders’ meeting on Sept. 11 to discuss the acquisition and would abandon the deal if shareholders vote against it, the company said.
The share purchase agreement with Kaiyueh is to expire on July 16 next year, it said.
The acquisition is also subject to approval from the NCC and the Fair Trade Commission, the company added.
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