Want Want Group (旺旺集團), the conglomerate with businesses from broadcasting to food, said it’s leading an investment group that agreed to buy cable TV operator China Network Systems Co (中嘉網路) from MBK Partners Ltd.
Chao Yu-pei, special assistant to Want Want’s president, said the group signed the agreement on Monday, but declined to provide financial details.
The investors agreed to buy closely held China Network’s stock for about US$1.4 billion and assume US$1 billion of debt, a person familiar with the matter said, asking not to be identified because the accord is confidential.
The purchase would allow Want Want chairman Tsai Eng-meng (蔡衍明) to expand his media assets in a market where almost 80 percent of homes tune in to cable TV. For MBK, the sale would help the private equity fund, founded by former Carlyle Group executives, collect more than double the US$600 million it spent buying China Network’s stock more than three years ago.
“If Want Want has media outlets covering the entire Greater China, companies who want to buy advertisements can do it cost effectively,” said Monika Yang, who helps oversee almost US$2 billion at Hamon Asset Management Ltd in Hong Kong. “They are already very successful in the consumer front.”
Want Want outbid Permira Advisers LLP, which teamed up with Ruentex Group (潤泰集團), Macquarie Group Ltd and Bain Capital LLC, the person said. Choosing a Taiwanese buyer will help obtain regulatory approval, the person said.
The sale comes as Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興) — no relation to Tsai Eng-meng — seek to approval to buy Kbro Co (凱擘), the nation’s top cable TV operator, from Carlyle Group.
The National Communications Commission (NCC) said on Oct. 6 it would seek public and expert opinion before deciding whether to approve the purchase of Kbro.
MBK, which bought China Network with the Koo family, effectively controls the cable TV operator through a preference-share arrangement with the local partner, people familiar with the plan said in August.
China Network had 1.05 million subscribers at the end of last year, giving it a 21 percent market share of Taiwan’s cable TV market, while Kbro had a 22 percent share with 1.11 million customers, the NCC said in a July report.
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