Providence Equity Nabs Stake in China’s TVB

Providence Equity Partners is among the investors who have acquired a controlling stake in Hong Kong broadcaster Television Broadcasts Ltd., Reuters reported. Media mogul Sir Run Run Shaw sold his stake in the firm to the investor group, which was led by Charles Chan, chairman of ITC Corp Ltd. The stake is estimated to be worth between $1.16 billion and $1.29 billion, Reuters said.

(Reuters) – Television Broadcasts Ltd (TVB) (0511.HK) said media mogul Sir Run Run Shaw has sold his stake in Hong Kong’s dominant broadcaster, giving control to an investor group including U.S. private equity firm Providence Equity Partners and local dealmaker Charles Chan.

TVB shares fell 5.8 percent on Thursday after the news but are still up 8.8 percent this month as potential buyers contested the stake, estimated to be worth between HK$9 billion and HK$10 billion ($1.16-1.29 billion) by local media.

Buyers vying for control of TVB, which distributes Chinese-language programmes globally, included Shanghai Media Group, PCCW Ltd (0008.HK) Chairman Richard Li and Henderson Land Development Co Ltd (0012.HK) Vice-Chairman Lee Ka-kit.

The winning investor group is led by Charles Chan, chairman of ITC Corp Ltd (0372.HK) and a noted Hong Kong dealmaker. It also includes Cher Wang, daughter of Taiwanese technology billionaire Wang Yung-ching, and global telecommunications and media private equity specialist Providence.

Cher Wang is chairwoman of smartphone maker HTC Corp (2498.TW) and chipmaker VIA Technologies Inc (2388.TW).

The investment was a private one by Chan, ITC Deputy Chairwoman Rosanna Chau told reporters on Thursday.

“The joining of the new investment group will inject new momentum and bring positive energy to the company (TVB),” Chau said. She declined to give the financial terms of the deal.

Telecommunications and media specialist Providence manages more than $22 billion in assets globally and has significant investments in Asia, including Qiyi, its online video content portal joint venture with China’s Baidu Inc (BIDU.O), which promotes premium licensed content.

Last year, the company acquired Australian education specialist Study Group for A$660 million ($657 million), in one of Asia-Pacific’s few leveraged buyout deals. The buyout was backed with an A$330 million leveraged loan, according to Thomson Reuters LPC data.

TVB was the subject of a controversial attempted leveraged buyout in 2008 from Country Garden Holdings Co Ltd (2007.HK) Chairman Yang Guo Qiang, backed by a $1 billion leveraged loan, as Shaw sought to sell his stake in the company he founded in 1967. The deal ended in the market turmoil that followed the collapse of Lehman Brothers, as global bank liquidity and risk appetite dried up.

DEAL DETAILS

Shaw Brothers (Hong Kong) Ltd shareholders signed an agreement on Wednesday to sell their entire stake in Shaw Brothers to the investment group controlled by Chan, Cher Wang and Providence, TVB said in a filing with the Hong Kong stock exchange late on Wednesday.

Shaw Brothers, controlled by the Shaw, has a 26 percent stake in TVB.

The deal is expected to be completed on or before March 31.

TVB’s other shareholder, The Shaw Foundation Hong Kong Ltd, will also sell a portion of its 6.23 percent shareholding in the broadcaster to independent third parties.

After the deals, The Shaw Foundation Hong Kong, TVB Deputy Chairman Mona Fong and the investor group will collectively hold less than 30 percent of the broadcaster. ($1=HK$7.77=A$0.9957) (By Stephen Aldred; Additional reporting by Donny Kwok; Editing by Chris Lewis)