The Fair Trade Commission (FTC) yesterday requested Next Media Group (壹傳媒集團), the four members of a consortium formed to buy elements of the group, and their parent companies, to submit more detailed documentation for review amid growing concern over market competition under the NT$17.5 billion (US$603.55 million) deal.
The request came after the commission started reviewing the application from Global Professional Investment, a subsidiary of Formosa Plastics Group (FPG, 台塑集團), and found the application to be insufficient.
“We demand all buyers of Next Media and the media company itself to make submissions, and although all buyers listed on the contract are overseas companies, their shareholders are obligated to make submissions as well,” commission spokesman Sun Lih-chyun (孫立群) said at a press conference.
Based on the buyout deal under the names of four overseas companies, FPG chairman William Wong (王文淵) would acquire 34 percent of Next Media’s print assets, followed by Want Want China Times Group (旺旺中時集團) president Tsai Shao-chung (蔡紹中) with 32 percent, Chinatrust Charity Foundation (中信慈善基金會) chairman Jeffrey Koo Jr (辜仲諒) with 20 percent and Lung Yen Life Service Corp (龍巖集團) chairman David Lee (李世聰) with 14 percent.
Global Professional submitted an application because under the deal the company would acquire more than one-third of the shares of Next Media, higher than the threshold set for filing applications for review, Sun said.
Sun said that the commission had ruled that the Apple Daily and the Sharp Daily, two Chinese-language newspapers owned by Next Media, account for more than 25 percent of the market share of the local newspaper industry. As a result, a takeover application has to be filed.
Citing enforcement rules under the Fair Trade Act (公平交易法), the commission said all participants in the buyout deal, including Next Media, should file applications for review.
The commission also said that since all members of the consortium and their parent companies will be assigned, or will lease operations or assets from Next Media, all of them are defined as participants in the deal under the enforcement rules.
Sun said the review process will begin after the FTC gathers enough information submitted by the deal’s participants. The commission could take up to 60 days to review the deal and the buyers can not take over Next Media’s outlets before the review process is complete.
The buyout contract deal states that if the deal cannot be approved and completed by March 27, both buyers and sellers have the right to withdraw.