MBK Plans $2 Billion Sale of China Network Systems

HONG KONG (Reuters) – (Reuters) – MBK Partners, the South Korea-based private equity fund, has put its China Network Systems (CNS) cable company up for sale, sources with direct knowledge of the matter said on Thursday, in a deal that could fetch around $2 billion.

MBK Partners has hired Morgan Stanley (MS.N) to advise on the planned exit, the sources told Reuters. MBK, which manages about $3.7 billion in assets, has 13 companies in its portfolio. The buyout firm bought the business for $1.5 billion in 2007.

The sources declined to be identified as the sale process is not yet public. CNS, MBK and Morgan Stanley were not available for comments.

The auction is expected to attract top global private equity firms looking to put down a sizeable equity check for a cash flow heavy business with 20 percent market share in Taiwan.

“This will be the Oriental Brewery of 2010,” said one of the sources, who is seeking to advise a buyer.

Several private equity funds are exploring exits from their profitable investments, encouraged by improved market sentiment and higher valuations in the regional stock markets.

TPG [TPG.UL], for instance, is looking to float its China Grand Automotive Services Co. in deal worth about $1 billion, while Bain Capital is in the process of selling its Asia Pacific operations of Australia-themed restaurant restaurant chain Outback Steakhouse.

Last month, TPG also sold its 23.9 percent stake in Singapore Parkway Holdings (PARM.SI) to Indian hospital chain Fortis Healthcare (FOHE.BO) for $685 million.

By Michael Flaherty and Denny Thomas