Taiwan Optical Platform Co. (??????) is aiming to acquire a majority stake in Eastern Broadcasting Co. (EBC, ????) and says it hopes to transform it into a 4K high-definition TV platform after it completes its deal to purchase the major Taiwanese broadcasting company.
Taiwan Optical, which provides a wide range of telecommunication services, such as Internet broadband access service, online gaming, e-learning, VoIP service, and wireless broadband service, announced on Friday that it will acquire a 65 percent stake in EBC for NT$11.12 billion (US$351 million).
EBC is one of the top 10 TV stations in Taiwan; operating 10 TV channels, including two news channels.
Currently, Taiwan Optical Platform ranks as the 5th largest cable TV system operator in the country, having about 295,600 subscribers in central Taiwan, where the company is based, and taking a 5.8 percent share in the local cable TV market.
The suitor said that the acquisition is expected to strengthen digital TV development in Taiwan by transforming EBC into a 4K HD TV broadcasting platform.
Under the agreement, Taiwan Optical will acquire a 61 stake in EBC from BiJ Lou B.V. and PX Capital Partners B.V., two subsidiaries of the U.S-based Carlyle Group. In addition, the buyer will acquire additional shares from EBC employees to boost the total stake to 65 percent.
The announcement of the acquisition deal came less than two weeks after Los Angeles-based American company DMG Entertainment walked away from its NT$18.9 billion bid to acquire more than 80 percent stake in EBC.
DMG had shown its interest in EBC and had previously announced its bid to acquire the stakes owned by Eastern Media and Carlyle. However the deal was delayed as DMG's bid was closely scrutinized by lawmakers in Taiwan, amid concerns that Chinese funds would be behind the transaction. The delay led to DMG eventually dropping the deal.
The interest in the TV station arose after Eastern Media International Corp (????), which owns a 21.32 percent stake in EBC, and private equity firm Carlyle announced in December 2015 that they would dispose of their stakes in the station.
In 2006, Eastern Media sold its 61 percent stake to Carlyle. Market sources said that since DMG rescinded its offer, Eastern Media has been trying to buy back its stake in EBC from Carlyle.
After being informed of the deal between Taiwan Optical and Carlyle, Eastern Media said that it did not rule out the possibility of filing a lawsuit against the takeover bid since Eastern Media had secured the right to purchase the stake owned by Carlyle before any other potential suitors do so.
The latest bid for EBC by Taiwan Optical is also pending approval from Taiwan's Investment Commission, Fair Trade Commission and National Communications Commission.
Taiwan Optical said that its plan to acquire a 65 percent stake in EBC has been approved by its board of directors and it will seek bank loans to finance the acquisition.
Taiwan Optical said that its stake transaction contract with Carlyle will expire in March 2017, but is subject to an extension of three months in a bid to secure regulatory approval.
Source: Focus Taiwan News Channel