Alibaba agrees on $266 mln acquisition deal with South China Morning Post (updated)

Great Wall Pan Asia Holdings

14/12/2015 05:47

* Alibaba to buy media business of SCMP Group for $266 mln 
    * Deal includes South China Morning Post newspaper 
    * Deal raises question over outlook for editorial 
independence 
 
 (Adds analyst comment, details) 
    SHANGHAI/HONG KONG, Dec 14 (Reuters) - Alibaba Group Holding 
Ltd  BABA.N  has agreed on a $266 million deal to acquire the 
South China Morning Post and other media assets of SCMP Group 
Ltd  0583.HK , a deal that has raised a question over the 
outlook for its editorial independence.    
    In a filing to the Hong Kong stock exchange on Monday, SCMP 
Group Ltd  0583.HK  cited an "uncertain" future for traditional 
publishing as a key reason behind the sale, adding Alibaba would 
likely be able to "unlock greater value" from the business.  
    The all-cash purchase transfers control of the 112-year-old 
English language newspaper from Malaysian tycoon Robert Kuok to 
Chinese billionaire Jack Ma at a time of increasing concern over 
Beijing's control over China's most free-wheeling city.  
    As Hong Kong's leading English-language newspaper, the South 
China Morning Post reports on issues and topics that are 
considered sensitive in mainland China, where the websites of 
several international media are blocked.   
    "I think it will be interesting to see if the existing 
reporters and editorial staff would like to continue to stay. 
It's worth watching," said James Sung, a political analyst at 
City University of Hong Kong.  
    While Ma is known to be politically well-connected, others 
said the shift in ownership was not as drastic as some people 
were making out. Kuok has owned the broadsheet since 1993.  
    "It was not like the SCMP was totally independent from 
political influence beforehand... Before, it was already owned 
by a business tycoon with close ties to the Chinese government," 
said Professor Francis Lee, who teaches at Chinese University of 
Hong Kong's School of Journalism and Communication.  
    Alibaba's Executive Vice Chairman Joe Tsai dismissed 
suggestions Alibaba would compromise the newspaper's editorial 
independence in a letter to readers, but added the world needed 
"a plurality of views when it comes to China coverage".  
    SCMP Group said it expected to record a gain of around 
HK$1.4 billion from the asset sale. It plans to use the proceeds 
for the payment of a special cash dividend.  
    Shares of SCMP Group have been suspended since February 2013 
because it did not meet the minimum required percentage of total 
issued share capital available on the public market.  
    Alibaba has acquired or invested in a growing portfolio of 
media and content companies in recent years. In June, the 
company agreed to pay $194 million for an undisclosed stake in 
domestic financial media firm China Business News.  urn:newsml:reuters.com:*:nASB09QP5 
($1 = 7.7501 Hong Kong dollars) 
 
 (Reporting by Adam Jourdan in SHANGHAI, Donny Kwok in HONG KONG 
and Jess Macy Yu in BEIJING; Editing by Anne Marie Roantree and 
Ryan Woo) 
 ((adam.jourdan@thomsonreuters.com; +86 21 6104 1778; Reuters 
Messaging: adam.jourdan.thomsonreuters.com@reuters.net)) 
 
Keywords: SCMP GROUP ALIBABA/