Taiwan's Fair Trade Commission approves CNS sale

The regulator said in a statement released on December 30 that it was satisfied the deal would not have an adverse impact on competition, although this assessment will be subject to periodical review. It also noted that Far EasTone may not take control of the CNS board or become directly or indirectly involved in management of the business.

Last year, MSPEA and Far EasTone agreed to acquire CNS from MBK Partners for an enterprise valuation of $2.3 billion, including around $1.6 billion in debt. The deal was structured so that MSPEA would take equity ownership of the company, with Far EasTone subscribing to a bond of up to NT$17.12 billion ($542.6 million).

The structure is significant because government agencies hold a minority stake in Far EasTone and the government, political parties and the military are currently barred from investing in media companies. Should the restriction be lifted at some point in the future, Far EasTone could theoretically convert the bond to equity with a view to taking control of CNS.

CNS is Taiwan's largest cable operator, providing cable and digital television, broadband internet and other services to nearly 1.29 million subscribers. Far EasTone is interested in integrating these wired solutions with its own wireless offerings and expand into the smart home market.

MBK announced the acquisition of CNS for $1.5 billion - including $840 million in debt and equity participation from co-investors - from Koo's Group and Star TV in October 2006. Exiting the asset has proved complicated, with sales to Want Want China Holdings and Ting Hsin International Group both falling through.

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• Topics
• Regulation
• Exits
• Media
• Greater China
• Exit
• Trade sale
• Taiwan (China)
• Media
• Morgan Stanley Private Equity Asia
• MBK Partners