New Investors to Acquire TVB as Shaw Brothers Unload Shares

Television Broadcasts Ltd. (TVB) announced that its biggest shareholder, Shaw Brothers, will be selling its 26% stake in the company to three investors, led by ITC Corp. Ltd’s Charles Chan Kwok Keung. The sales transaction will be completed by March 31, 2011. Although the value of the transaction was not announced, based on TVB’s current stock price of $45.90 (HKD), the transaction is expected to close at approximately $5.23 billion (HKD).

Charles Chan is a Hong Kong businessman whose strength was in acquistions. The other investors who are interested in purchasing significant shares in TVB include Cher Wang of HTC of Taiwan and Providence Equity Partners, an American equities company.

TVB said that Sir Run Run Shaw will remain as Chairman and Mona Fong will remain as the Deputy Executive Chairman after the company’s share sale. Three new board members will also be nominated, including Ms. Wang and Mr. Chan, who had invested in TVB’s Hong Kong pay-TV venture earlier.

TVB’s co-founder and Chairman, Sir Run Run Shaw, also owns a 6.23% stake in TVB through the Shaw Foundation. The 103-year-old Mr. Shaw intends to sell a portion of the Foundation’s stake to an independent third party before the larger sales transaction of the Shaw Brother’s stake.

TVB’s New Majority Stakeholder, Charles Chan’s Profile

Charles Chan is a Hong Kong businessman and currently Chairman of ITC Corporation. He has over thirty years’ international corporate management experience in the construction and property sectors as well as in strategic investments. Mr. Chan, dubbed by the press as the “King of Shells” due to his acquisition strategy in building his conglomerate empire, has close ties to billionaire, Li Ka Shing. Mr. Chan specializes in acquiring companies and then selling his stake at a higher market valuations. During the dot com boom in 2000, Mr. Chan acquired Colliers International (oil and gas predecessor), to sell the majority stake to PCCW and Japanese Optical Communications. Mr. Chan once owned a total of fifteen listed companies, including Oriental Charm and Sing Pao Daily News at one point in time. Since his portfolio of companies carried a large level of liabilities, Mr. Chan was rumored to have been financially unstable during the economic recession.

Mr. Chan is married, but was romantically linked with actress, Michelle Ye Suen. The paparazzi snapped photos of Mr. Chan dancing intimately with Michelle Ye at a nightclub in 2006. Mr. Chan also had rumors with TVB artist, Sonija Kwok Sin Lei in 2006. However, Mr. Chan denied rumors with both actresses.

Excerpt from the Sun

Jayne: Although TVB announced that Sir Run Run Shaw and Mona Fong will remain in their respective positions as Chairman and Deputy Chairman after the transfer in ownership, I expect many changes to lie ahead. Due to Sir Run Run Shaw’s age and Ms. Fong not wanting to continue to run TVB after his imminent death, they decided to sell TVB and cash in on the deal. Shaw Brothers has been looking to sell its stake since 2008 but could not find a suitable investor due to the financial recession. 

I am a little saddened to hear about Shaw Brothers selling its stake in TVB. What does it mean for TVB’s future now that Charles Chan will become the majority stakeholder? What impact will this have on its family television dramas? What does this mean for fans? 

Mr. Chan is bound to bring in his own management people. I first heard of Mr. Chan’s name through his past rumors with Michelle Ye and Sonija Kwok. From his business reputation, Mr. Chan appears to be more of a speculator, hoping to invest in companies which he can sell his stake at a higher price.  At the same time, his background does not lie in the entertainment industry and is his interest in TVB long-term?

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  1. I’m not sure what will happen either. I don’t think the artists will be affected yet, but I’m sure we’ll see changes and some shifting in management and depts very soon. We hope that there won’t be much changes and that business will go on as usual, but with Look suk and Mona Fong out of the picture very soon because of his age, change will be inevitable. Charles Chan is a businessman, and I have a feeling his acquisition will lead to a change in culture. I’m not sure if his interest in TVB will be long term to help the company improve its overall standards and grow, or just a short term interest to get some big profits then move on?

  2. With the change of management & etcs. Everyone will be affected. The company will have to be restructure. On the negative side most likely many people will be retrench or they have to opt or Voluntary Separating Scheme.

  3. But that won’t affect the actors. It will affect the workers and to them I wish them luck.

    1. Funn, the managers of those actors, there might be changes. Looking forward to some saking of managers who overworked their staffs. :p

      1. If the new guys are as money minded as they’re, they probably wouldn’t care much for worker’s rights or overworked employees as long as revenue stays up. I think these managers may be promoted!

  4. It affects the shareholders deeply… TVB stock in Hong Kong FALL. There are other shareholders took the pie include the HTC phone maker chairwoman and the USA investment bank plus other third parties….

    Interesting news…

    1. Larry3, definately. Investors will sell their shares when the price is high. Even when the rumour take over few months ago TVB share price is at a yo yo range. Supply more than demand of shares there is where the market drop.

  5. Funn, if they are money minded of coz they will employ new breeds and the old onces will be cut off one by one cut. As I mentioned in my earlier post VSS.

    In the coporate world everything is politics. You have the cash you can be the KING OF THE WORLD.

  6. I don’t like this news. Mr.Chan doesn’t seem like someone who really wants to make a company successful. He just want to buy and sell a company to make money. I worried about the quality of TVB production in the future. Will it become worse?

    1. Kidd, you might just be hitting the target. Many TVB artiste are now branching to China market & overseas. Why? Is because something is definately not right with TVB at the moment. Look at the productions of series these 3 years. Not up to the mark.Only one or two series worth watching. I rather stick to watching those TVB retro series of the late 70’s till mid 90’s.

      1. Think Manchester United and you see where TVB may be heading.

    2. Tvb still controls 85% of the Hong Kong television viewership market, which makes them a significant media company.

      We’ll have to see Charles Chan in action and what he’ll do first. Change will be inevital and I just hope that Mr. Chan will not lose sight of TVB’s core business, which is producing dramas. Would someone such as Peter Lam from Media Asia have been a better fit, or was Mr. Lam’s interests set on wider horizons?

      I guess we should be glad that Albert Yeung from EEG did not become the majority stakeholder. Otherwise we’ll get a lot of EEG newbies pushed down our throats. Mr. Yeung seems to have an endless supply of money, since he is now dabbling in diamonds and real estate development. Mr. Yeung was responsible for the worldwide distribution of many big film projects such as “Let the Bullets Fly” and “If You Are the One 2”. So much money and influence in all reaches…

      It seems like all the really rich billionaires in Hong Kong own conglomerate empires, they all dabble in real estate development, financial inevestments, and more. Everyone wants a share of many pies? Is this insurance in time of recssion? Can they really do it all?

  7. Mr. Chan will restructure the entire TVB organization/departments to fit his short-term interests. Departments will be cut and budgets will be squeezed.

    1. This is really uncertain of unknowns, may affect TVB deeply especially the Big 5 music company issue.

  8. dont think this is good for TVB, might get more Taiwanese dramas airing now?

  9. In the initial stages this will be good for TVB. From Charles Chan’s point he will want to buy low sell high hence he will gear TVB to higher heights and using his business wisdom to invest further to grow the company, for example, maybe new technologies/strategies. Since RR Shaw was going to sell off the company it makes sense that for the last months/years he would not have invested anymore and hence the deterioration although he will need to maintain the share value to sell at a good price.

    The employees from top to down, back to front end will need to buckle up. Those who have been good contributors will definitely remain but normally after an acquisition it will be good time to get rid of dead wood.

    However, the problem will come when Charles cash out. As seen with major investors who turns companies for their profit often leave after a huge profit and when they sell it will be without passion.

    1. He will have to say that for now so as not to rock the boat too much as TVB is a listed company. Shareholders confidence. As an owner you will have to interfere to set the bigger direction and although his management team will be the one carrying out. Since he is not from this industry he will have to rely heavily on the current management team but when he is familiar with the business, maybe another story.

      He sure will be concerned with the revenues/expenditure, earnings and investment. Indirectly he will be interfering with TVB management. Never seen an owner buy a company and totally not interfere in its profits or pursuit of profits. And profits are what management are there to drive.

      1. Candy, well maybe yes and maybe no. depending on how the CEO sees it.

        I don’t buy the story. Changes can happen. Think logically, Uncle 6 has sold off his stake so anything can happen in a blink of an eye.

        Then again the shareholders confidence, just have an EGM.

      2. Rach, shareholders confidence don’t come from EGMs. It comes from the value and the reaction of the news by share prices/movement. He can say anything but it’s how the shareholders react. Personally I have done company sales before and can vouch that internally it is not so simple. Uncle 6 did not do this at the blink of the eye..they had it coming.BTW, what has the CEO got to do with it. He is also another employee unless he also own some shares.

      1. Candy, well maybe yes and maybe no. depending on how the CEO sees it.

        I don’t but the story. Changes can happen. Think logically, Uncle 6 has sold off his stake so anything can happen in a blink of an eye.

        Then again the shareholders confidence, just have an EGM.

      2. That’s what I meant.. there will be changes and he will “interfere” with management. Just that he won’t make big ones in the near future (6 months or so est.) After that, maybe different story. Seen it in a lot of M&A’s. And especially careful with listed companies as they have more compliances to follow. Anyway, he owns 26%, there are other shareholders.

  10. I would be optimistic about this new change. People tend to jump to the worst case scenario with changes, which isn’t always a bad thing but it definitely makes things worst.

    I’m not too knowledgeable on Asian investors but after reading so much about Warren Buffet and other successful investors, investing should always be a long-term mindset. Hopefully like minds think alike and TVB will grow in the right direction.

    Also, I do want to relate this to Yahoo Jerry Yang. Jerry is the developer of Yahoo and stayed as CEO for quite some period. He was so embedded and emotionally attached that he didn’t recognize the downfall of Yahoo and the rise of Google. IMO, TVB is similar to the Yahoo situation. It’s time for new blood to take over TVB.

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