Investor
Relations

News

Announcement & Media Releases - Mediacorp and Singapore Press Holdings Merge Their TV And Free Newspaper Operations

BackSep 17, 2004



 

 SINGAPORE PRESS HOLDINGS LIMITED

ANNOUNCEMENT & MEDIA RELEASES - MEDIACORP AND SINGAPORE PRESS HOLDINGS MERGE THEIR TV AND FREE NEWSPAPER OPERATIONS

ANNOUNCEMENT :-


SINGAPORE PRESS HOLDINGS LIMITED
(Incorporated in the Republic of Singapore)
Announcement pursuant to Rule 704(15)(c) of Listing Manual


1. INTRODUCTION

1.1 Objective of Proposed Transactions

  •  
      The Board of Directors of Singapore Press Holdings Limited ("SPH") wishes to announce that it has today entered into agreements (together the "Agreements") with MediaCorp Pte. Ltd ("MediaCorp") and certain of its subsidiaries with the objective of rationalising the Company's free-to-air television broadcasting and free newspaper businesses.


1.2 Description of Proposed Transactions

The Proposed Transactions comprise:

  •  

      (a) the subscription by SPH of shares in a new company, MediaCorp TV Holdings Pte Ltd ("MCTV Holdings") constituting 20% of the issued share capital of MCTV Holdings ("Subscription Shares") for a sum of $10 million payable in cash on issue by MCTV Holdings; and

      (b) the acquisition by SPH from MediaCorp of shares in MediaCorp Press Ltd ("MPR") constituting 40% of the issued share capital of MPR ("Acquisition Shares") for a total sum of $19.16 million payable in cash on transfer of the shares to SPH.

1.3 The Companies

  •  
      MPR, MediaCorp TV Singapore Pte Ltd ("MCTV") and Media Corp Studios Pte Ltd ("MSD") are wholly-owned subsidiaries of MediaCorp.

      MCTV carries on the business of free-to-air television broadcasting in Singapore (in particular, Channels 5 and 8 and TVMobile) and MSD carries on the business of producing content for television broadcasting.

      MPR publishes the free newspaper known as Today.

      MCTV and MSD will become the wholly-owned subsidiaries of MCTV Holdings before the issue of the Subscription Shares and therefore MediaCorp will transfer to MCTV Holdings all the issued share capital of MCTV and MSD before the issue of the Subscription Shares.

2. THE CONSIDERATION PAYABLE AND THE VALUE OF SHARES

2.1 The Consideration

  •  
      The consideration payable by SPH for the Subscription Shares and for the Acquisition Shares was arrived at on a willing buyer and willing seller basis.


2.2 The Value of the Subscription Shares and Acquisition Shares

  •  
      On the date of completion of the Proposed Transactions, the net tangible asset value of each Subscription Share is expected to be approximately $1 and the net tangible asset value of each Acquisition Share is expected to be approximately 10.7 cents.

2.3 Future Funding

  •  
      After the completion of the Proposed Transactions, SPH and MediaCorp may, from time to time, provide capital to MCTV Holdings and MPR in proportion to their respective shareholding percentages in these entities, as and when required.


3. APPROVALS REQUIRED

  •  
      In-principle approval from the regulatory authorities has been received for the Proposed Transactions, and formal regulatory approvals will be sought before their completion.


4. Completion

  •  
      Subject to the respective conditions set out in the relevant Agreements being satisfied, completion of the subscription and issue of the Subscription Shares and the purchase and transfer of the Acquisition Shares is expected to take place by the end of this year.


5. CONSEQUENCES OF COMPLETION OF PROPOSED TRANSACTIONS

5.1 TV operations

  •  
      After completion of the issue of the Subscription Shares, MCTV will continue to operate Channels 5, 8 and TVMobile, and MediaCorp Studios, which produces the bulk of MediaCorp's local programming will continue its usual operations.

      MCTV will also operate Channel U. The commercial viability of Channel i will be reviewed before legal completion.


5.2 Free  Newspaper

  •  
      SPH also publishes the free newspaper known as Streats. Streats will be merged with Today after completion of the acquisition of the Acquisition Shares. Today will incorporate the Streats name in its masthead and will continue to be published by MPR.


6. RATIONALE FOR THE PROPOSED TRANSACTIONS

  •  
      SPH views the Proposed Transactions as a win-win solution for both parties. It comes at a time when both MediaCorp and SPH have incurred continuing losses in their respective mass-market TV and free newspaper businesses. The Proposed Transactions will allow SPH to maintain its presence in the TV platform, and more importantly, stem losses for its TV business.


7. FINANCIAL IMPACT OF THE PROPOSED TRANSACTIONS

  •  
      The subscription of the Subscription Shares and the acquisition of the Acquisition Shares will be funded from SPH's internal resources.

      The Proposed Transactions are not expected to have any material impact on the net tangible assets per share or earnings per share of SPH for the financial year ended 31 August 2004 and for the current financial year ending 31 August 2005.



8. INTEREST OF DIRECTORS

  •  
      Save as disclosed above, none of the Directors of SPH has any interest, direct or indirect, in the Agreements and the transactions contemplated thereby.



9. DOCUMENTS AVAILABLE FOR INSPECTION

  •  
      A copy of each of the Agreements is available for inspection at SPH's registered office during normal office hours for a period of three months from the date of this Announcement.



Ginney Lim May Ling
Khor Siew Kim
Company Secretaries