Tom.com signs MOU on ATV stake


The ATV stake would broaden Tom.com into television and could signal Li Ka-shing's push into Chinese media

HONG KONG, China -- Tom.com said late Tuesday it has signed a memorandum of understanding to buy 33 percent of Asia Television, or ATV.

Tom.com is the technology arm of tycoon Li Ka-shing's business empire. It now has a tentative deal to buy the stake from Lai Sun Development Co.

Tom.com has agreed to issue 87.2 million new shares to take the stake. If the memorandum in fact leads to a sale, it would mark Li's first dabble in the television industry.

ATV is the second-largest broadcaster in this city. Tom.com started life as an Internet portal but has broadened into media, including magazines.

Li's interest may mark the start of a push into great China's media market in general.

TVB stock selling off

That prospect is hurting stock in ATV's rival, dominant broadcaster Television Broadcasts, or TVB.

TVB was down 4.01 percent at HK$31.10 at noon on Wednesday, steepening Tuesday's declines (Tuesday close). It has around 80 percent of the local TV market.

Tom.com shares are up 7.5 percent at HK$3.575. That's on a day the broader Hong Kong market is down, leaving the Hang Seng off 0.35 percent at 10,805.59 at the lunch break.

Trading in both Tom.com and Lai Sun Development was suspended on Tuesday, after Apple Daily newspaper reported that the ATV stake might be for sale.

Phoenix chairman largest holder

Tom.com will become the second-largest shareholder in ATV if it buys the Lai Sun stake. A company owned by Phoenix Satellite TV chairman Liu Changle is the largest, with 46 percent of ATV.

The Tom.com deal would also require regulatory approval.

Li does own a commercial radio station, Metro Broadcast, through his Cheung Kong Holdings and Hutchison Whampoa companies.