National flagship broadcaster China Central Television (CCTV)
has reportedly approached Hong Kong's dominant Chinese-language
broadcaster Television Broadcasts (TVB) for a stake.
The potential deal, revealed by local media but not confirmed by
either broadcaster, would create the first tie-up between mainland
and Hong Kong television broadcasters, ushering in more such deals,
analysts predict.
Shaw Brothers, TVB's controlling shareholder, "has at various
times been approached by and has had discussions with potential
interested parties regarding a possible purchase of shares," the
company said in a statement.
However, it declined to reveal if CCTV was one of the parties
when asked by China Daily yesterday. CCTV was not available for
comment.
English-language Hong Kong newspaper The Standard said on Monday
CCTV was eyeing TVB's assets, citing an unidentified mainland
source.
It is the second time mainland giants have looked at Hong Kong's
TV companies in two months.
In June, China Mobile Ltd, the world's largest mobile operator,
acquired almost 20 per cent of Hong Kong's Phoenix Satellite TV
Holdings Ltd for a reported HK$1 billion (US$128 million).
Local media analysts said a TVB stake sale is on the cards, as
99-year-old tycoon Run Run Shaw, TVB's founder, has failed to find
a suitable successor over the past years.
Shaw, now TVB chairman, has a 32.5 per cent stake in the company
through Shaw Brothers and Shaw Foundation.
Hong Kong tycoons such as Li Ka-shing, Richard Li and Chow
Yei-ching are also interested in the deal and CCTV might join a
consortium to strengthen its bargaining power, local reports
said.
Among potential bidders, CCTV would have the best synergy with
TVB, as they play in the same field, said Casor Pang, strategist
for Sun Hung Kai Financial.
Hong Kong-based analysts also said the deal would be good for
both parties.
"It's a typical mix-and-match TVB wants to go to the mainland,
and CCTV wants to go overseas," said Patrick Yiu, associated
director of CASH Asset Management.
TVB and CCTV set up a joint venture in 2001 to distribute
content in markets outside the mainland.
For CCTV, a further stake purchase would consolidate its
leadership in China and fuel its campaign to enhance its influence
in Asia and the world.
"TVB's top position in Hong Kong is really attractive to
ambitious players like CCTV," Pang said.
TVB reaches more than 2 million families in Hong Kong and lands
on more than 30 countries and regions, with its programs covering
nearly 30 million viewers globally.
(China Daily August 2, 2006)
