Carlyle finds new buyer for Taiwan’s EBC

Taiwan Optical said in a filing that it will acquire the private equity firm's entire stake in EBC through its directly-owned subsidiary. In addition, it will acquire additional shares from EBC employees to boost the overall interest to 65%.

The announcement came shortly after US-based media firm DMG Entertainment abandoned its NT$18.3 billion bid for a more than 80% interest in EBC. Last November, Carlyle agreed to sell its stake of about 67% to Dan Mintz, DMG's CEO. Parent company Eastern Media International (EMI) subsequently agreed to sell its 21.32% holding to DMG. However, the deal faced close regulatory scrutiny due to fears that DMG had mainland Chinese backing.

Carlyle paid $127 million for a 40% interest in EBC in 2006. Two years later, it put in another $62 million, taking its holding to 49.6%. The firm has since made further incremental increases.

In parallel to the original EBC investment, Carlyle acquired its former parent, Eastern Multimedia, for $1.3 billion. It was renamed Kbro and sold to the Tsai family's Dafu Media in 2010 for $1.9 billion. A previous exit attempt - to Taiwan Mobile - failed to get past the regulators.

EBC directly owns eight Chinese-language television channels in Taiwan, covering news, finance, movies, drama, entertainment, and content for children. The company's Asia network takes in markets such as Hong Kong, Singapore, Macau and Malaysia, while it also carries on cable and satellite services in North America and Europe.

Founded in 2006, Taiwan Optical mainly provides cable and other pay TV services in the domestic market. It also offers multimedia services such as online shopping.

The EBC transaction requires approval from Taiwan Optical's board and from local regulators. Responding to the bid, EMI told local media that it is considering legal action against Taiwan Optical on the grounds that EMI had right of first refusal on Carlyle's stake. According an industry source, EMI had right of first offer but it expired before the PE firm agreed terms with Taiwan Optical.

The Taiwan Optical-Carlyle agreement expires in March of next year, but can be extended by three months in order to accommodate the approvals process.

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• Topics
• Greater China
• Media
• Trade sale
• Consumer
• The Carlyle Group
• Taiwan (China)