National flagship broadcaster China Central Television (CCTV) has reportedly approached Hong Kong's dominant Chinese-language broadcaster Television Broadcasts (TVB) for a stake.
The potential deal, revealed by local media but not confirmed by either broadcaster, would create the first tie-up between mainland and Hong Kong television broadcasters, ushering in more such deals, analysts predict.
Shaw Brothers, TVB's controlling shareholder, "has at various times been approached by and has had discussions with potential interested parties regarding a possible purchase of shares," the company said in a statement.
However, it declined to reveal if CCTV was one of the parties when asked by China Daily yesterday. CCTV was not available for comment.
English-language Hong Kong newspaper The Standard said on Monday CCTV was eyeing TVB's assets, citing an unidentified mainland source.
It is the second time mainland giants have looked at Hong Kong's TV companies in two months.
In June, China Mobile Ltd, the world's largest mobile operator, acquired almost 20 per cent of Hong Kong's Phoenix Satellite TV Holdings Ltd for a reported HK$1 billion (US$128 million).
Local media analysts said a TVB stake sale is on the cards, as 99-year-old tycoon Run Run Shaw, TVB's founder, has failed to find a suitable successor over the past years.
Shaw, now TVB chairman, has a 32.5 per cent stake in the company through Shaw Brothers and Shaw Foundation.
Hong Kong tycoons such as Li Ka-shing, Richard Li and Chow Yei-ching are also interested in the deal and CCTV might join a consortium to strengthen its bargaining power, local reports said.
Among potential bidders, CCTV would have the best synergy with TVB, as they play in the same field, said Casor Pang, strategist for Sun Hung Kai Financial.
Hong Kong-based analysts also said the deal would be good for both parties.
"It's a typical mix-and-match TVB wants to go to the mainland, and CCTV wants to go overseas," said Patrick Yiu, associated director of CASH Asset Management.
TVB and CCTV set up a joint venture in 2001 to distribute content in markets outside the mainland.
For CCTV, a further stake purchase would consolidate its leadership in China and fuel its campaign to enhance its influence in Asia and the world.
"TVB's top position in Hong Kong is really attractive to ambitious players like CCTV," Pang said.
TVB reaches more than 2 million families in Hong Kong and lands on more than 30 countries and regions, with its programs covering nearly 30 million viewers globally.
(China Daily August 2, 2006)
