Tom.com Ltd announced yesterday it has acquired a controlling stake and the management right in a Hong Kong-based Chinese mainland television station from US media conglomerate AOL Time Warner.
The move will make Tom.com a more diversified media operator and offer the company access to the mainland TV market, industry analysts said.
Tom.com, a Chinese-language media company owned by Hong Kong billionaire Li Ka-shing, became the largest shareholder of China Entertainment Television Broadcast Ltd, a 24-hour Mandarin TV channel, by taking over a 64 percent stake. Tom.com will issue about 21 million additional shares, priced at HK$2.535 (33 US cents) each, to fund the purchase, the company said in a statement released after it finalized terms late yesterday.
Turner Broadcasting System Asia Pacific Inc, an AOL Time Warner subsidiary which owned 85 percent of CETV, will hold the balance.
"CETV is the first TV broadcasting operation in our media portfolio and it will provide us with a valuable foothold in the huge but tightly regulated Chinese mainland television market," Tom.com's Chief Executive Sing Wang said in the statement.
Upon completion of the deal, Tom.com will take overall charge of management at the TV station.
Tom.com, which already spans four sectors - the Internet, outdoor advertising, publishing, and sports and entertainment - has long been keen on buying a TV station to tap into the mainland market.
"Tom.com will operate CETV better than the previous owners as its background is close to the mainland's culture. The TV station didn't localize well under AOL Time Warner's management," said Ma Ying, an analyst with Haitong Securities Co Ltd.
Experts say the US-based media giant is eager to sell non-profitable overseas ventures like CETV as its financial status has deteriorated.
AOL Time Warner posted a net loss of nearly US$100 billion in 2002, the largest corporate loss in US history.
(Shanghai Daily July 3, 2003)
