KUALA LUMPUR -
The merger of Malaysia's Chinese-language
publishing groups - Sin Chew Media Corp Bhd,
Nanyang Press Holdings Bhd and Ming Pao Enterprise
Corp Ltd - is on course to be completed next
February.
The three publishers this week
signed the agreement on the merger, which will
create the largest Chinese-language media company
outside China, with a market capitalization of
more than RM1 billion (US$292 million).
The merger represents a landmark for the
Malaysian capital
market, as it is the first
dual primary listing for a Malaysian company
listed on both the Bursa Malaysia and Hong Kong
Stock Exchange.
Sin Chew executive
director Rita Sim predicted that the merged media
entity will see organic growth not only in
traditional newspaper circulation but also from
new media platforms, which are expected to be a
significant contributor to the group's revenue
over the next three to five years.
"The
contribution from the multimedia segment to
revenue now is less than 5%. The group will be
putting a lot of resources into the new media
platform[s]," she said at a press conference on
Monday. "We want to digitize our rich contents so
that it can take different multimedia platforms
such as online, broadcasting and radio."
Sim said market forces are driving the
group to new media platforms, including online
publications. She pointed to the United Kingdom as
an example of the market trend, where newspaper
online advertising expenditure already exceeds
print revenues. However, she said the speed of
implementation of the new media platform for the
new merged group will depend on the market and how
technology progresses.
"You can't take it
[new media platforms] on too early, otherwise you
will be losing a lot of money," she said, adding
that the existence of relevant infrastructure for
the new media is also an important consideration.
Sim also said that while the group will
focus mainly on Chinese-language media, it will
explore ways to translate the group's content into
a language that growing non-Chinese audiences
interested in happenings in China can comprehend.
On the merger exercise, she said, the
necessary approvals from the authorities are
expected in September, and the deal will be
completed with the listing of Ming Pao on the
Bursa Malaysia early next year. Meanwhile, Ming
Pao is to take over the listing status of Sin
Chew, thus giving it a listing on the Bursa
Malaysia and Hong Kong Stock Exchange.
Sim
said the name of the merged listed company is
expected to change from Ming Pao to another name,
which she did not disclose at the press
conference. However, she did say the existing
brand names of the publications, such as Sin Chew,
Ming Pao, Nanyang, Guang Ming, would be
maintained.
Under the merger exercise,
Nanyang shareholders will be entitled to exchange
their shares at RM4.20 each for new Ming Pao
shares at an issue price of HK$2.70, which
represents an indicative basis of 3.53 new Ming
Pao shares for every one existing Nanyang share
held.
Sin Chew shareholders will be
entitled to exchange their shares at RM4.00 for
every Ming Pao share priced at HK$2.70,
representing an indicative basis of 3.36 new Ming
Pao shares for every one existing Sin Chew share
held.
Tiong Hiew King, currently the
largest shareholder in the three newspaper groups,
is to maintain his controlling stake in the new
group through a majority 52% stake. Up to 30% of
the shares in Ming Pao after the exercise are to
be traded on the Hong Kong Stock Exchange and the
rest on the Bursa Malaysia.
One of the
regulatory hurdles the merged entity will have to
clear is compliance with Malaysia's 30%
bumiputera, or ethnic Malay, share-holding
requirement for locally held corporate entities.
CIMB Investment Bank Bhd's director of investment
banking, Christopher Chan, said that because Sin
Chew and Nanyang have already complied with the
race-based affirmative-action requirements, the
calculation can be based on the shares held by the
existing shareholders of Ming Pao.
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