Decision due to profit slump
HONG KONG — Media Asia, the Hong Kong group responsible for “Infernal Affairs,” which was remade into Oscar-winning pic “The Departed,” will be taken private by eSun Holdings after a year in which its profits slumped.
ESun and Media Asia are both controlled by property tycoon Peter Lam, who owns Hong Kong’s Ritz Carlton Hotel. Lam is also building a massive entertainment complex in neighboring Macau that will include studios and casinos.
In the offer detailed Wednesday, eSun is proposing to pay Singapore $0.265 (17¢) per share for the 63% of Media Asia that it does not already own. ESun said that takeover reflects the disappointing performance and poor liquidity of Media Asia’s shares since they were listed on the Singapore stock exchange at $1.64 in 2004. It also said that Media Asia, which last year made a strategic decision to concentrate on production of bigger-budget movies, will benefit from being run without the pressure of stock market scrutiny and expectations of incremental profit rises.
Financial data accompanying the offer shows that revenue and profits at Media Asia have slipped in both years since flotation. Revenue last year fell 20% from $29.8 million to $23.8 million. Net after-tax profits dove 74% to $810,000, and payment of an end of year dividend was skipped.
With 2006 production pegged at five movies, the film production division shifted from profits of $4.96 million in 2005 to losses of $1 million last year. For the current year only, three movies have been greenlit. Distribution was a strong point in 2006.