Taiwan Cable Firm China Network Systems to be Sold for $2.3 Billion

Taiwan Cable Firm China Network Systems

HONG KONG — China Network Systems, one of Taiwan’s largest cable TV network operators, is to be sold for some $2.4 billion.

A previous deal to sell the carrier was blocked by Taiwan’s regulators, but analysts expect the new transaction to have a higher chance of receiving approval.

A 60% stake in CNS is being sold by Korea-based private equity firm MBK Partners, which acquired it in 2007. According to financial industry sources, the buyer is reported to be the Wei family-controlled Ting Hsin International Group. It reportedly outbid iPhone maker Hon Hai and Far Eastern groups.

The Wei family and Ting Hsin control the Hong Kong-listed Tingyi International, a manufacturer of instant noodles and beverages, as well as mobile phone carrier Taiwan Star.

CNS has 11 cable TV channels and 1.19 million subscribers, or some 23% of Taiwan’s pay-cable market, according to Taiwan’s Fair Trade Commission.

Taiwan’s National Communications Commission blocked a previous attempt by MBK to sell CNS in 2012 to the Want Want China Times Group, whose owner Tsai Eng-meng is a vocal supporter of Taiwan’s reunification with China. Want Want, which is also listed in Hong Kong, is a snacks and beverages manufacturer which already owns two daily newspapers, a terrestrial TV network, a cable network and a magazine. It was also a bidder for Hong Kong free to air Asia Television.

Acquisition of CNS by Tsin Hing may keep the network operator out of pro-Beijing hands. It will also bolster Taiwan Star’s ability to offer bundled mobile, cable and Internet services. That could spell greater competition with another conglomerate. In 2010, Taiwan’s largest cable TV operator Kbro was sold to Fubon Group, a conglomerate which also owns Taiwan Mobile.

Taiwan Broadband Communications, another cable and Internet group, was last year listed as an investment trust (Asia Pay Television Trust) on the Singapore Stock Exchange after its private equity owners, Macquarie, were unable to sell their stake. It competes against Kbro and CNS in cable and Chunghwa Telecom in Internet service provision.

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  1. Finance Guy says:

    *Macquarie. One “r.”

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