Carlyle, Taiwan TV Deal Hits Hurdle Before Deadline

TAIPEI (Reuters) – Carlyle Group’s $1 billion deal to take a stake in mobile carrier Taiwan Mobile (3045.TW) has hit a regulatory hurdle and it was unclear if a June 30 completion deadline would be met, according to an official of the mobile firm.

Under the deal, agreed last September, Carlyle will exchange its stake in Taiwan cable TV company Kbro for a 15.5 percent stake in Taiwan Mobile, while Taiwan Mobile will pay T$32.8 billion ($1 billion) via a share swap and cash. It will also assume T$24 billion of debt.

But the deal, which would create Taiwan’s largest pay TV operator, has run afoul of a law in Taiwan prohibiting state ownership of media bodies.

“It has suddenly become an issue that a company partially owned by the government cannot buy a media stake,” Josephine Juan, deputy spokeswoman at Taiwan Mobile, said on Friday.

“It is hard to say if we can close the deal before June,” she added. “We are still waiting for an approval from regulators.”

The problem has arisen because the city government of Taipei has an indirect interest in Taiwan Mobile via a stake in banking group Fubon Financial Holdings (2881.TW). Fubon’s controlling shareholder, the Tsai family, is Taiwan Mobile’s largest shareholder.

The broadcast regulator, the National Communications Commission (NCC), has proposed changing the law to allow for some indirect ownership. It could not be reached for immediate comment.

Carlyle declined to comment.