TAIPEI Feb 15 The buyer of private equity fund MBK Partners' Taiwan cable TV unit will have to give more information to the island's broadcast regulator concerning its media operations, the latest delay in the $2.4 billion deal.
Taiwan's National Communications Commission (NCC) asked Want Want China Holdings to offer additional information to prove its media outlets are operated on an independent basis, an NCC official said on Wednesday after a hearing on the deal.
The request came after Want Want's chairman told the Washington Post recently that he cannot wait to see Taiwan and China unified. That stirred concerns in Taiwan over the possibility of mainland involvement in the media of the self-ruled island, which China has vowed to take back.
"After our committee meeting today, we decided to ask the buyer to submit more information to clarify the questions we have and elaborate that its media are run independently," said Chen Kuo-lung, a NCC director.
"We will ask the buyer to explain his comments in the Washington Post," Chen said.
While business ties between the two sides have blossomed, any sign of mainland involvement in Taiwan's media would still be politically unacceptable.
The Want Want group has extensive business operations in China, where it is among the biggest rice cake makers, and is also one of Taiwan's top TV and print media groups, owning the China Times daily newspaper and the CtiTV cable station.
The sale of the MBK unit, China Network Systems (CNS), has already been held up for more than a year in a regulatory wrangle, with other opponents warning the deal could leave the buyer with too much control over local media.
The NCC is expecting Want Want to send the requested information before end of this month, Chen said, declining to reveal the questions or comment on when a final decision will be made.
The sale would be the second private equity exit from a Taiwanese broadcaster to be held up for over a year.
Carlyle Group had to wait for more than a year to close a deal to sell its Taiwan cable TV unit, Kbro. Carlyle finally got approval last November, after having rejigged its deal to get around regulators' objections.
Private equity firms have had a difficult time in recent years in Taiwan, coming under lengthy scrutiny from regulators who see the industry as interested mainly in making a quick profit.
In one of the most high profile deals, regulators in June turned down Kohlberg Kravis Roberts & Co's $1.6 billion joint management buyout of electronics component maker Yageo Corp, a decision that led to many private equity firms rethinking Taiwan as an investment choice.
CNS and Kbro hold over half of the Taiwanese cable TV market, with a combined total of around 2.2 million subscribers. The third-largest player is TBC, controlled by Macquarie Group .
Taiwan's cable market offers one of the highest profit margins in the Asia-Pacific region, and has a cable penetration rate of above 80 percent. (Editing by Jonathan Standing)