China Media Capital to buy 21st Century Fox's Star TV stake

The sale is part of Fox's broader agenda to streamline its affiliate ownership structures. It comes barely two months after the company divested a 12.15% stake in Chinese satellite television operator Phoenix Satellite Television Holdings to TPG Capital for HK$1.66 billion ($214 million).

Star China TV is a joint venture with CMC formed in 2010. It operates three 24-hour Mandarin channels - Xing Kong, Xing Kong International and Channel [V] Mainland China - and the Fortune Star Chinese movie library.

"The acquisition and control of Star China was the first investment by CMC when it was established. Over the past three years, the company has achieved outstanding performance thanks to the dedicated efforts of its shareholders and management," Ruigang Li, chairman of CMC, said in a statement.

Star launched in 2001 and News Corporation bought it two years later for nearly $1 billion. The acquisition complemented Phoenix, a joint venture set up in 1996 that offered a clutch of Mandarin channels, including Phoenix Chinese Channel, Phoenix Movies Channel and Phoenix InfoNews Channel.

News Corporation CEO Rupert Murdoch wanted to create a broadcasting platform that could reach into the mainland China market but a combination of a crackdown on illegal satellite dishes and a failure to obtain full landing rights - a problem for all foreign broadcasters - meant this never came to fruition.

In 2005 Chinese regulators also banned overseas investors from buying domestic TV channels and other media outlets, forcing News Corporation to cancel its joint venture with Qinghai Satellite Television, which was expected to broadcast nationwide.

In 2009, Star was restructured into four units: Star India, Star Greater China, Star Select and Fox International Channels Asia. This paved the way to a gradual exit from the China assets.

Last year News Corporation completed a split that saw its cable, television and movie businesses fall under the Fox banner while a new News Corporation was created to absorb the publishing assets.

CMC was set up in 2010 and claims to be China's first media and entertainment-focused private equity fund approved by the National Development and Reform Commission (NDRC). Sponsors include China Development Bank, Wenhui-Xinmin United Press Group and Shanghai Media Group. Li is the former chairman of Shanghai Broadcasting and president of Shanghai Media Group.

In addition to Star China, CMC has created separate joint ventures with Dreamworks Animation and Hong Kong broadcaster TVB and bought a stake in OCJ, a Chinese TV shopping business. It is also backing a management buyout of Charm Communications, a US-listed Chinese advertising agency.

The PE firm focuses on growth capital, corporate restructuring and buyout opportunities, generally targeting companies with enterprise valuations of RMB300 million ($49.5 million) to RMB2 billion, writing equity checks of RMB140-480 million. With LP co-investment it claims that transactions in excess of RMB6 billion are within reach.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Buyouts
• Media
• Greater China
• China Media Capital
• buyout
• Media