* Huge gaps between prices for Carlyle, Eastern Media
* Eastern Media sees 8 times EBITDA as reasonable-source
* Deal subject to Taiwan regulatory approval
By Faith Hung
TAIPEI, Jan 8 Taiwan's Eastern Media
International Corp is bidding for Carlyle Group's
entire 61 percent stake in local TV company Eastern
Broadcasting, two sources with direct knowledge of the matter
said on Wednesday, at a valuation substantially below Carlyle's
This is not the first time Carlyle has tried to exit Eastern
Broadcasting and not the first time it has struggled to sell an
asset in Taiwan, which has fallen out of favour with private
equity due to clashes with the country's regulators.
Eastern Media, the cable TV network's second-biggest
shareholder, sees Carlyle's stake is worth T$7.2 billion ($240
million), said the sources, declining to reveal the price of
Eastern Media's bid.
The U.S. private equity firm launched the sale of its
controlling stake in Eastern last year, seeking as much as $700
million, according to two sources with knowledge of the matter.
"They are asking for such a high price. It is just way too
unreasonable...because it's not going to be easy to find a buyer
willing to pay their price," said one of the sources, speaking
on condition of anonymity due to sensitive nature of the matter.
Both Carlyle and Eastern Media declined to comment.
Carlyle invested in the cable TV network in 2006, in part
because the island's cable TV industry offered stable cash flow
and advertising revenue. But exiting investments has proved
tricky for private equity firms in Taiwan.
MBK Partners also tried to exit its cable TV investment in
CNS. Its plan to sell the unit to Want Want Group was turned
down by Taiwan regulators and the firm last year hired banks to
explore a listing in Singapore through a business trust.
That plan is on hold, according to a source with knowledge
of the matter. A similar Singapore listing of a Taiwanese
broadcaster by Macquarie Group, Asian Pay Television
Trust, has lost 20 percent of its value after the IPO.
Asian Pay Television closed at S$0.775 on Wednesday compared to
its IPO price of S$0.97.
Eastern Media sees a valuation of eight times Eastern
Broadcasting's earnings before interest, taxes, depreciation and
amortization as reasonable, said the source.
Eastern Broadcasting has doubled its earning per share to
T$8 in 2013 from a year ago, said the other source.
Carlyle is expected to make a decision on the bid by the end
of this month, the sources added.
Any deal is subject to approval from Taiwan's regulators.
On Wednesday, Eastern Media shares ended down 1.4 percent,
lagging the broader market's 0.5 percent rise.