Far EasTone, CNS deal intact despite delay

By Lisa Wang  /  Staff reporter

Thu, Jan 12, 2017 - Page 12

Far EasTone Telecommunications Co Ltd (遠傳電信) yesterday said its indirect investment in local cable TV operator China Network Systems Co Ltd (CNS, 中嘉網路) retained intact, rejecting speculation that the acquisition is on the brink of collapse due to prolonged regulatory reviews.

The nation’s third-largest telecom’s comments came after the Chinese-language Economic Daily News reported that CNS’ major shareholder, MBK Partners LP, is to seeking new buyers for its CNS shares, after Morgan Stanley Private Equity Asia IV’s (MSPE) plan to buy CNS stalled because of regulatory setbacks.

MSPE is to retract an application filed with the government to acquire the nation’s largest cable TV operator, given its slim chance of receiving regulatory approval, the report said.

Local cable TV operator Daffiness TV Ltd (大豐有線) and Lungyen Life Service Corp (龍巖) are interested in buying CNS, the report said.

“We have verified information regarding the acquisition with the seller and the seller said the application has not been withdrawn,” Far EasTone said in a statement yesterday.

In July 2015, MSPE offered to buy a significant stake in CNS for NT$74.5 billion (US$2.33 billion) through a holding company called North Haven Private Equity Asia IV LP from MBK. Far EasTone will indirectly own a share of CNS, as it spent about NT$17.12 billion in cash subscribing to corporate bonds issued by NPHEA’s local subsidiary.

MSPE’s acquisition of CNS was blocked by the Investment Commission in March last year, as state funds are not allowed to invest in media.

An unspecified stake in Far EasTone is held by the government.

The National Communications Commission (NCC) has requested a second review of the case, even though the regulator gave a conditional go-ahead to the acquisition in January last year.

“We hope the NCC will speed up its review,” Far EasTone said. “This is the largest project filed by a foreign investor in recent years. We hope people will look at this case fairly and objectively, and consider its impact on Taiwan’s digital convergence.”