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Providence out of bidding race for Taiwan's CNS - reports

  • Anita Davis
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PE firm Providence Equity Partners has reportedly dropped out of the race to acquire MBK Partners-backed Taiwan cable operator China Network Systems (CNS) – an asset that could fetch up to $2 billion - leaving players Australian investment bank Macquarie Group, Bain Capital and Permira as the final contenders.

South Korea-based MBK first purchased CNS in 2007 for $1.5 billion, or 11x EBITDA, and announced in April that it would exit its investee. Reports tout that the sale would be the biggest PE exit seen in Asia Pacific this year and Morgan Stanley is advising CNS on the process. Local potential strategic bidders also include Taiwanese conglomerate Ruentex Group and Tsai Eng Meng, head of Want Want China Holdings. Early reports also cited interest from the Blackstone Group, Kohlberg Kravis Roberts & Co., though there is no news on whether they are still participating in the auction.

MBK owns almost 100% of the asset. CNS's steady cash flow from subscriber revenues makes it a particularly attractive target, able to support more leverage and therefore a higher sale valuation. Last month, Japanese electronics giant Sony Corporation separately made an NT$6 billion ($188 million) acquisition bid for MBK Partners-backed Taiwanese cable television company Gala TV, according to local reports.

 

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