KUALA LUMPUR: Star Publications (M) Bhd is strengthening its position in the Chinese publication segment by acquiring a controlling stake in Red Tomato Media Sdn Bhd, the publisher of a free weekly Chinese newspaper.
Yesterday Star, whose flagship publication is the English daily The Star, announced it had entered into a conditional share sale agreement with Red Tomato Media’s shareholders to acquire 83.61% equity interest.
The publishing company is paying RM1.49 million cash for the 83.61% stake of about 2.48 million Red Tomato shares. The deal values the entire privately held media company at RM1.78 million or 60 sen per share. Star is acquiring the stake in Red Tomato from the latter’s shareholders, namely its executive chairman and managing director Gan Chin Kew, Red Tomato CEO (management, operations, branding and marketing) Tang Swee Lan and Yew Chin Theng.
Gan will continue to hold a 9.66% stake in Red Tomato Media from the 38.63% stake he had earlier while Yew’s entire 54.63% stake in the company will be taken up by Star. Tang’s stake in Red Media meanwhile remains at about 6.73% after selling one share to Star.
“The investment provides Star with an immediate opportunity to enter into the Chinese print adex [advertising expenditure] market,” Star said in a filing with Bursa Malaysia yesterday.
Star added that Red Tomato will add synergy to its existing stable of media assets which will enable the group to leverage diverse multimedia offerings and identify new markets.
In a press statement, Star group managing director Ho Kay Tat said the acquisition of Red Tomato complements Star’s Chinese-language media assets including the Chinese radio station 988FM and monthly Chinese business magazine Shang Hai. Founded in 2008 by Chinese media industry veterans, Red Tomato Media publishes Red Tomato, a free weekly 24-page Chinese newspaper featuring economic and lifestyle content distributed in the Klang Valley and Penang on Fridays.
For FY10 ended June 30, Red Tomato posted a net loss of RM2 million on the back of RM1.82 million revenue, according to information filed with the Companies Commission of Malaysia.
As at June 30, 2010, Red Tomato Media had current liabilities of RM2.15 million, non-current liabilities of RM97,168 and total assets of RM940,035.
Among the conditions stipulated is that the vendors shall obtain the Ministry of Home Affair’s approval for the deal and secure the renewal of the printing permit for Red Tomato Biz Health and Beauty newspaper.
Star said its impending entry into the Chinese newspaper market is “very timely” given that the two major sporting events to be held next year are expected to provide a healthy boost to adex growth. The two sporting events are the UEFA European Cup 2012 and the London Olympics 2012.
Star said the investment in Red Tomato is expected to strengthen the group’s potential to improve its revenue streams and profit prospects.
Nevertheless, Star noted that the print media industry is facing intense competition from within the as well as from other media particularly the Internet and television, which are increasingly getting a bigger slice of the total adex pie.
Star’s latest venture forms part of the group’s plans to position itself as a multimedia group, diversifying from its traditional revenue base of print media.
In the past year, Star had been active on the acquisition trail. It recently picked up a 4.99% in stake in Catcha Media Bhd, a magazine publisher and online media firm.
Star also bought an 80% stake in radio station operator Capital FM Sdn Bhd and a 51% stake in Li TB Holdings Ltd, which operates the Life Inspired lifestyle television channel. Star’s shares yesterday fell one sen to RM3.20.
This article appeared in The Edge Financial Daily, December 2, 2011.
Yesterday Star, whose flagship publication is the English daily The Star, announced it had entered into a conditional share sale agreement with Red Tomato Media’s shareholders to acquire 83.61% equity interest.
The publishing company is paying RM1.49 million cash for the 83.61% stake of about 2.48 million Red Tomato shares. The deal values the entire privately held media company at RM1.78 million or 60 sen per share. Star is acquiring the stake in Red Tomato from the latter’s shareholders, namely its executive chairman and managing director Gan Chin Kew, Red Tomato CEO (management, operations, branding and marketing) Tang Swee Lan and Yew Chin Theng.
Gan will continue to hold a 9.66% stake in Red Tomato Media from the 38.63% stake he had earlier while Yew’s entire 54.63% stake in the company will be taken up by Star. Tang’s stake in Red Media meanwhile remains at about 6.73% after selling one share to Star.
“The investment provides Star with an immediate opportunity to enter into the Chinese print adex [advertising expenditure] market,” Star said in a filing with Bursa Malaysia yesterday.
Star added that Red Tomato will add synergy to its existing stable of media assets which will enable the group to leverage diverse multimedia offerings and identify new markets.
In a press statement, Star group managing director Ho Kay Tat said the acquisition of Red Tomato complements Star’s Chinese-language media assets including the Chinese radio station 988FM and monthly Chinese business magazine Shang Hai. Founded in 2008 by Chinese media industry veterans, Red Tomato Media publishes Red Tomato, a free weekly 24-page Chinese newspaper featuring economic and lifestyle content distributed in the Klang Valley and Penang on Fridays.
For FY10 ended June 30, Red Tomato posted a net loss of RM2 million on the back of RM1.82 million revenue, according to information filed with the Companies Commission of Malaysia.
As at June 30, 2010, Red Tomato Media had current liabilities of RM2.15 million, non-current liabilities of RM97,168 and total assets of RM940,035.
Among the conditions stipulated is that the vendors shall obtain the Ministry of Home Affair’s approval for the deal and secure the renewal of the printing permit for Red Tomato Biz Health and Beauty newspaper.
Star said its impending entry into the Chinese newspaper market is “very timely” given that the two major sporting events to be held next year are expected to provide a healthy boost to adex growth. The two sporting events are the UEFA European Cup 2012 and the London Olympics 2012.
Star said the investment in Red Tomato is expected to strengthen the group’s potential to improve its revenue streams and profit prospects.
Nevertheless, Star noted that the print media industry is facing intense competition from within the as well as from other media particularly the Internet and television, which are increasingly getting a bigger slice of the total adex pie.
Star’s latest venture forms part of the group’s plans to position itself as a multimedia group, diversifying from its traditional revenue base of print media.
In the past year, Star had been active on the acquisition trail. It recently picked up a 4.99% in stake in Catcha Media Bhd, a magazine publisher and online media firm.
Star also bought an 80% stake in radio station operator Capital FM Sdn Bhd and a 51% stake in Li TB Holdings Ltd, which operates the Life Inspired lifestyle television channel. Star’s shares yesterday fell one sen to RM3.20.
This article appeared in The Edge Financial Daily, December 2, 2011.
