Chinese Internet giant Alibaba Group Holding Ltd (阿里巴巴) is to pay US$266 million for Hong Kong’s South China Morning Post(SCMP), the newspaper said yesterday, far higher than analysts’ estimates, in a deal that has sparked fears the paper will lose its independent voice.
The business had been valued at half that amount, and some observers said that the hefty price tag reflects Alibaba’s desire to control media in the territory.
The deal comes as concern over press freedom grows after attacks on journalists, reports of pressure on editorial staff from authorities and increasing self-censorship.
Photo: AFP
Alibaba “has agreed to purchase the media business of the [SCMP] Group for a cash consideration of HK$2,060,600,000,” the newspaper said in a statement to the Hong Kong Stock Exchange.
The group also owns the Hong Kong editions of Esquire, Elle, Cosmopolitan and Harper’s Bazaar magazines.
In a letter to the newspaper’s readers following the announcement of the sale, Alibaba executive vice chairman Joe Tsai (蔡崇信) vowed the SCMP would be “objective, accurate and fair.”
However, in an interview published on the paper’s Web site, Tsai accused Western media of bias against China, saying that Alibaba would “see things differently.”
Francis Lun (藺常念), chief executive of Hong Kong brokerage Geo Securities Ltd (智易東方證券), said the inflated price handed to the paper’s Malaysian owner, tycoon Robert Kuok (郭鶴年), who bought a controlling stake in 1993, reflected a political motivation.
“If your purpose is trying to control the local media, it has its value. The actual economic benefit is doubtful,” Lun said, echoing views that Alibaba chairman Jack Ma’s (馬雲) close ties with Beijing would inevitably affect coverage and promote a China-centric view.
Simsen International Financial Group (天行國際金融集團) associate director Jackson Wong (黃志陽) agreed the sale was “very expensive,” but said Ma had splashed out to capitalize on the SCMP brand and online presence as Alibaba extends its reach in the region where it is on a buying spree.
“It would be extremely difficult for a new media company to establish the name,” Wong said.
“Alibaba has not only made investments in e-commerce ... they have been buying different kinds of companies,” he said, adding that the SCMP could help Ma “broaden his business reach.”
The once globally renowned English-language paper was founded in 1903 and has long given international readers an insider’s perspective on Hong Kong and China, but readers’ trust has dipped over a more pro-Beijing editorial policy, a shift which took place after Kuok took control.
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