After several unsuccessful attempts over the past 16 years, the nation’s two largest karaoke chains — Holiday Entertainment Co (好樂迪) and Cash Box KTV (錢櫃) — are pushing ahead with plans for a merger.
A deal would help “integrate their [the two companies’] resources, enhance operational efficiency and boost cost control,” Holiday Entertainment said in a statement.
The merger plan is to be submitted to the Fair Trade Commission next week, Holiday Entertainment spokesman Morris Li (李俊德) said.
Under the proposed plan, Holiday Entertainment would sell all of its shares to Cash Box for NT$6.7 billion (US$217.38 million), or NT$67.7 per share, Li said.
Holiday Entertainment would become a fully owned unit of Cash Box and its shares would be delisted from the local bourse on Oct. 1, but the companies would continue to operate independently, he said.
While the boards of directors of Holiday Entertainment and Cash Box have approved the deal, it still has to be approved by their respective shareholders and the proper authorities, the companies said in the statement.
The companies first initiated a merger plan in April 2003 and gained conditional approval from the Fair Trade Commission in July that year.
However, the regulatory permission expired on Jan. 1, 2004, after Cash Box failed to deliver the necessary documents to Holiday Entertainment by the Nov. 17, 2003, deadline.
In December 2006, the companies resubmitted their merger plan to the commission, but it was rejected in March the following year due to concerns it might undermine consumers’ interests.
Li yesterday shrugged off concerns over antitrust issues if the two companies were to join forces, saying the competitive landscape has changed since 2007 and some new entrants have performed well.
Holiday Entertainment holds a 26.06 percent stake in Cash Box, while Cash Box owns a 32.396 percent stake in Holiday Entertainment, the companies said.
Both reported increases in sales last year, because of their dominant positions in the local karaoke market. Holiday Entertainment operates 52 outlets in Taiwan, while Cash Box has 16.
Holiday Entertainment posted revenue of NT$3.01 billion last year, up 3.28 percent from a year earlier, while Cash Box saw sales rise 3.34 percent to NT$3.87 billion.
Holiday Entertainment reported earnings per share (EPS) of NT$4.63 for the first three quarters of last year, compared with NT$3.52 for the same period in 2017, while Cash Box’s EPS reached NT$5.06 in the first half of last year, up from NT$3.3 a year earlier.
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