TAIWAN — Taiwanese conglom Want Want China Holdings has agreed to buy China Network Systems, the self-ruled island’s leading cable TV company, from private equity group MBK Partners.
The deal by the multi-industry group Want Want, which has businesses ranging from broadcasting to rice crackers, is worth $2.4 billion, with $1.4 billion in stock and the company assuming around $1 billion in debt, Bloomberg reported.
Want Want chairman Tsai Eng-meng bought a stake in Hong Kong’s Asia Television last year and acquired Taiwan’s China Times Group, owner of at least two newspapers and three TV channels on the island, in 2008.
Almost 80% of homes are hooked up to cable TV in Taiwan, and China Network Systems has among the highest profit margins in the region. Other bidders included Permira Advisers, which teamed up with Taiwan’s Ruentex Group, Macquarie Group and Bain Capital.
The choice of a local bidder will help smooth regulatory hurdles.
The sale means that MBK, a private equity group set up by former execs in the Carlyle Group, will cash in more than double the $600 million it spent buying China Network’s stock more than three years ago.
The sale comes as the Carlyle Group is trying to sell its holdings in Kbro Co., the island’s top cable TV operator, to the Tsai family — unrelated to the Want Want chairman.
China Network had 1.05 million subscribers at the end of 2009, giving it a 21% market share of Taiwan’s cable-TV market, while Kbro Co. had a 22% share with 1.11 million customers, according to a July report from Taiwan’s National Communications Commission.