Taiwan Mobile: no extension for Carlyle’s Kbro deal

30 Jun 2010

Taiwan Mobile has said it will not extend a deadline with private equity firm Carlyle on their stalled USD1 billion deal for Carlyle’s Taiwan cable TV unit stake, Kbro, citing regulatory problems. Carlyle’s plan to sell its stake in Kbro for 15.5% of Taiwan Mobile ran afoul of a law in Taiwan prohibiting state ownership of media bodies. The agreement expires today. Under the deal agreed in September, Carlyle would exchange its stake in Kbro for a 15.5% stake in Taiwan Mobile. Taiwan Mobile would pay TWD32.8 billion (USD1 billion) via a share swap and cash and assume TWD24 billion of debt.

The city government of Taipei has an indirect interest in Taiwan Mobile via a stake in parent group Fubon Financial Holdings. Fubon’s controlling shareholder, the Tsai family, is Taiwan Mobile’s largest shareholder. In April, Taiwan’s broadcast regulator, the National Communications Commission (NCC), had asked the companies to sort out the problem. ‘The main problem comes from the Taiwan regulators,’ said Josephine Juan, spokeswoman for Taiwan Mobile. She said the company was now studying its options.

The deal would have created Taiwan’s largest pay-TV operator with a 32% market share and 1.6 million subscribers.