Investor group headed by Charles Chan to obtain shares worth HK$5.2 billion

Television Broadcasts Ltd (TVB), the owner of Hong Kong's biggest TV station, said that Chairman Sir Run Run Shaw agreed Wednesday to sell Shaw Brothers (Hong Kong) Ltd's entire 26 percent stake in the company to an investor group controlled by businessman Charles Chan.

The financial terms for the transaction have yet to be made public. The stake is worth approximately HK$5.2 billion based on the current share price of TVB, which closed up 2.8 percent at HK$49.50 Wednesday.

Private equity firm Providence Equity Partners and Cher Wang - co-founder and chairperson of Taiwanese smart phone maker HTC Corporation - are the other two members of Chan's group, according to a TVB statement filed to the Hong Kong stock exchange late Wednesday. Charles Chan is chairman of ITC Corp Ltd, a listed investment holding company.

The transaction is expected to be completed by March 31 of this year, TVB said in the statement.

Simultaneously, Shaw's charity arm - the Shaw Foundation Hong Kong Limited, which currently holds a 6.23 percent stake in TVB - will also sell a portion of its shareholding to independent third parties by the same deadline, TVB said.

Upon completion of the transactions, the Shaw Foundation, TVB Deputy Chairperson and Managing Director Mona Fong - who currently owns approximately a 0.26 percent stake in TVB - and Chan's group will in total hold directly and indirectly less than 30 percent of TVB, the broadcaster said.

The transaction won't lead to a compulsory general offer for the rest of the company's shares. Investors acquiring stakes exceeding 30 percent of public companies in Hong Kong are required to make bids to buy out other shareholders under local listing rules.

In a separate statement, TVB said its current management will remain unchanged while Charles Chan, Cher Wang and Providence Equity Partners' CEO Jonathan Nelson will join the board of directors after the transaction is completed.

The deal draws an end to Sir Run Run Shaw's many decades in show business as well as settle persistent speculations about potential acquirers of Shaw's stake in the broadcaster.

Earlier this month, speculation that a group including Shanghai Media Group and PCCW Ltd Chairman Richard Li may take over TVB helped fuel a strong rally in TVB's share price.

Before that, reports in September 2010 said Henderson Land Development's Vice Chairman Lee Ka-kit was interested in buying a stake in TVB.

China Daily

(HK Edition 01/27/2011 page3)