MBK Partners Ltd’s plans to sell its US$2.4 billion stake in Taiwanese cable-television operator China Network Systems Co (中嘉網路) is faltering after the buyer became embroiled in a tainted-food scandal, people with knowledge of the matter said.
MBK’s agreement to sell the controlling interest to the nation’s Wei (魏) family expires soon, one of the people said, asking not to be identified as the matter is private.
The atmosphere in Taiwan now is “challenging” for the acquisition, so the family’s Ting Hsin International Group (頂新集團) has not submitted an application for government regulators to approve the deal, Ting Hsin spokesman Ted Chia (賈先德) said by telephone.
Should the deal collapse, it would be the second failed attempt by the US$8 billion private-equity manager to sell China Network Systems in about four years, hurting the potential return of its first fund raised in 2006.
MBK, North Asia’s biggest independent private-equity firm, is likely to seek another buyer if the existing pact expires, two people said.
Ting Hsin contacted banks for loans at the early stages of the deal, but is not currently in talks for such funding, Chia said.
The company will proceed in accordance with the terms of the deal agreement, he said, declining to comment further due to confidentiality agreements.
The Ministry of Economic Affairs’ Investment Commission has not received any application from Ting Hsin seeking deal approval, commission spokesman Emile Chang (張銘斌) said by telephone.
Ting Hsin has not submitted a filing to the National Communications Commission or the Fair Trade Commission, Chia said.
MBK would have generated a return on equity of about three times from a sale at a US$2.4 billion enterprise value, one person said.
Hong Sei-kyu, a spokesman for MBK at Weber Shandwick LLC in Seoul, declined to comment.
The possible end to the deal shows the widening fallout for Ting Hsin, owner of the Master Kong instant noodle brand, after food safety authorities said the company made lard and beef tallow adulterated with animal feed oils.
Prosecutors charged Wei Ying-chun (魏應充), one of the four brothers who run Ting Hsin, in October last year over alleged violations of food safety laws.
His brother Wei Ying-chiao (魏應交) stepped down that month as vice chairman and president of Taipei Financial Center Corp (台北金融大樓公司), operator of the Taipei 101 tower, which houses the city’s stock exchange.
MBK is not under pressure to sell China Network Systems, as it has already distributed some of the company’s profits to the private-equity fund’s investors, two of the people said.
Taiwanese cable operators can have margins as high as 60 percent of earnings before interest, taxes, depreciation and amortization, the people said.
A proposed sale to Want Want China Holdings Ltd (中國旺旺控股), initially agreed in 2010, was halted in 2013 after regulators expressed concerns about Want Want’s existing media holdings.
MBK also considered an initial public offering for China Network Systems in Singapore after the deal was scrapped, people with knowledge said in July 2013.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS