Shareholders of Taiwan Optical Platform Co (台灣數位光訊) yesterday gave the cable TV system operator the go-ahead on a NT$11.12 billion (US$348 million) acquisition of Eastern Broadcasting Co (EBC, 東森電視) after drawn-out discussions.
Some shareholders said they were concerned that the deal is too expensive and could fall through, given Taiwan Optical’s capital share of NT$1.24 billion.
Taiwan Optical Platform in October signed a share purchase agreement with Carlyle Group to buy its 61 percent share of EBC via a fully owned subsidiary. It also seeks to buy another 4 percent from EBC employees.
“Taiwan Optical books a stable cash flow from its operation of four cable TV stations and one broadband subsidiary,” the company told shareholders. “Besides, the company has market capital worth more than NT$15.5 billion.”
Taiwan Optical Platform shares edged 0.39 percent lower to NT$127 yesterday.
The Taichung-based company plans to seek syndicated bank loans and new shares sales to finance the acquisition.
The company’s board has approved a rights issue to raise as much as NT$3.05 billion to fund the deal, according to a Taiwan Stock Exchange filing issued on Friday last week.
The acquisition has come under scrutiny by local regulators amid speculation that Chinese funds could be involved in the transaction.
Taiwan Optical Platform chairman Rocky Chien (簡森垣) said that the company is 100 percent Taiwanese.
DMG Entertainment dropped its investment plan 10 months after its application to the National Communications Commission (NCC) and the Investment Commission. The government agencies have suspended the case due to serious concerns that Chinese investors could be behind the deal.
Taiwan Optical Platform must clear all regulatory hurdles before its agreement with Carlyle expires in March next year.
Taiwan Optical Platform is the nation’s fifth-largest cable TV system operator, with 295,600 subscribers, or about 5.8 percent of the total 5.11 million subscribers.
In the first three quarters of this year, the company saw its net profit fall 16.47 percent from NT$710 million to NT$593 million in the same period last year. Earnings per share fell from NT$6.37 to to NT$4.9 over the period.
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