The Taiwanese broadcast regulator has delayed its decision on private equity firm Carlyle Group’s proposed sale, for $1.17 billion, of its Taiwan cable TV unit, Kbro. The regulator cited concerns over competition issues, according to Reuters. The Tsai family, owners of Taiwan Mobile, had agreed to buy the station, but already own some cable TV operations.
(Reuters) – Taiwan’s broadcast regulator has put off its decision on Carlyle Group’s [CYL.UL] $1.17 billion sale of its Taiwan cable TV unit amid concerns over competition issues, a government source with direct knowledge of the situation said on Wednesday.
The delay for an unspecified time, marked another setback for Carlyle, which has not been able to conclude the deal of its Kbro unit since September 2009, as its sale was held up for almost a year by a local law that banned state ownership in media entities.
The delay could also spark uncertainty on the on-going bidding process for private equity investor MBK Partner’s sale of China Network Systems (CNS), the closest rival of Kbro. [ID:nTOE68J055]
The National Communications Commission (NCC) will seek more discussion on the sale to the Tsai family due to requests by some members who recently joined its review committee, said the source, asking not to be identified due to the sensitivity of the matter.
“The new members had concerns about whether the buyer would compete fairly in the market and would be committed enough to digitalise Kbro,” referring to the cable TV firm, Taiwan’s No.1 operator, the source said.
“The NCC will invite some scholars to discuss the issues, but when a conclusion will be reached has yet to be set,” said the source.
The regulator had said last week that it would give the buyer one more week to provide some additional paperwork. It also said it saw no major issues over approval of the sale after an earlier hurdle over state ownership had been overcome. [ID:nTOE68S050]
The Tsai family is the controlling stakeholder of phone company Taiwan Mobile , the original buyer of Kbro.
But the NCC blocked that transaction because the Taipei city government holds an indirect stake in Taiwan Mobile, meaning the phone firm would contravene a rule prohibiting state ownership of media entities.
In a restructuring of the deal in July to get round the hurdle, the Tsai family agreed to buy Kbro by itself rather than through Taiwan Mobile.
But competition issues remain as Taiwan Mobile already owns some cable TV operations.
(Reporting by Faith Hung; Editing by Jonathan Standing)