The proposed merger between the nation's two largest karaoke chains will continue despite an alleged dispute over legal issues, company executives reiterated yesterday.
Holiday Entertainment Co (
But the proposed deal seemed to collapse on Monday when Cash Box failed to deliver the necessary documents to Holiday by the Nov. 17 deadline. To conclude the deal, Holiday originally offered to swap 1.6 shares for every Cash Box share.
Holiday required the documents to apply for joint-listing with the Taiwan Stock Exchange Corp (
"We would still like to carry out the merger plan as announced in April, but it seems that we can't complete the transaction by January next year as scheduled," Holiday vice president Yang Chang-heng (
Yang said the company received the necessary paperwork from Cash Box on Tuesday.
"Now we will start to review these papers and decide when to refile the application with the stock exchange," he added.
A greater concern is Cash Box's unsettled lawsuits with several music video companies, according to Yang. MDS Multimedia Corp (弘音多媒體) and Meihua Multimedia Technology Co (美華影音) have filed lawsuits against Cash Box regarding distribution rights of music videos.
"We don't want to damage our shareholders' interests over the legal cases," Yang said. "Despite Cash Box having made the commitment, we still need to see a concrete solution to reassure our shareholders."
Cash Box, however, seemed to sing a different tune than Holiday. The company said it already handed in the papers required to apply for joint-listing in the stock market, and has guaranteed that it would take full responsibility for the lawsuits, a Chinese-language newspaper reported yesterday, quoting Cash Box vice president Tsai Yi-ming (
The disruption of the merger also influences the merged company's expansion project across the Taiwan Strait, where it expects to set up 43 stores and generate NT$10 billion in sales in the next five years.
"Although the management of the new company is not yet clinched, we have an advantage in this matter as we hold 16 percent of the shares, while Cash Box only holds around 6 percent," Yang said.
Holiday has 62 outlets in the nation that generated NT$3.795 billion in sales last year, while Cash Box reported NT$3.615 billion in the same period with 20 outlets.
The two firms account for about 58 percent of the KTV market in the nation.
Shares of Holiday slid NT$1.5, or 6.4 percent, to close at NT$22.0 on the TAIEX yesterday.
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