Television Broadcasts Ltd. sweetened the terms of its share buyback offer after Hong Kongâ€™s dominant free-to-air TV broadcaster received an unsolicited bid for 29.9 percent of the company from TLG Movie & Entertainment Group. The shares jumped to the highest since August 2015. TVB, which announced plans to repurchase as many as 138
million shares on January 24, boosted its offer price to HK$35.075 from HK$30.50 and cut the amount of shares to be purchased to 120 million, according to a filing. The stock gained 9.2 percent to HK$33.15, the highest close in more than 17 months.
Improving the terms of the buyback may ward off TLG Movieâ€™s approach, which is conditional on shareholders rejecting the buyback of the shares. TVB has attracted new investors including Li Ruigangâ€™s China Media Capital, which took a stake in 2015 through an investment group, after the late media mogul Run Run Shaw
sold control to buyers including HTC Corp. Chairwoman Cher Wang in 2011.
â€œItâ€™s obvious TVBâ€™s move is trying to increase the acquisition cost, hoping to fend off TLG,â€ said Caster Pang, head of research at Core-Pacific Yamaichi in Hong Kong.
Alex Chow, TLG Groupâ€™s chief executive officer and founder, told local media that TLG has sufficient funds for the acquisition and itâ€™s not a shell company. â€œOur bid isnâ€™t a hostile takeover, definitely not. Itâ€™s a friendly takeover,â€ said Chow. He added that TVB using borrowed money for the share buyback would hurt cash flow and isnâ€™t ideal for minority shareholders. TVB issued $500 million of bonds in October.
The surge in TVB shares has added about HK$1.23 billion ($159 million) to the broadcasterâ€™s market value, raising it to HK$14.4 billion. Planned spending on the repurchase of as much as HK$4.21 billion is unchanged from the initial level, according to TVBâ€™s statement Tuesday.
The revision to the previous buyback offer ensures the free public float of shares would not fall below the 25 percent minimum, TVB said Tuesday in the statement.
TVB last week said it was seeking more information on TLG Movie, particularly whether it has financial resources to support TVBâ€™s six-year investment plan. The broadcaster is obtaining information on the offerer, TVB spokesman S.Y. Tam said Tuesday.
Calls on Tuesday to TLGâ€™s Beijing office were not answered. The company says itâ€™s â€œengaged in the cultural industry and real estate development and investmentsâ€ and will make an announcement related to its offer during the week of Feb. 20, according to its Feb. 8 filing in Hong Kong.