Yahoo Finance Chinese State Firm Weighs Bid to Take Over SCMP From Alibaba
(Bloomberg) -- A company owned by the Chinese government is working on an offer to acquire Hong Kong’s influential South China Morning Post, according to people familiar with the matter.
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Bauhinia Culture (Hong Kong) Holdings Ltd. is interested in a deal with Alibaba Group Holding Ltd. that would see the city’s most prominent English-language newspaper join its stable of media properties, the people said, asking not to be identified as the information is private.
Alibaba has come under pressure from the Chinese government to divest some of its media assets, including SCMP, Bloomberg News reported in March.
A sale to Bauhinia would potentially assuage the government’s concerns, as it is fully state owned. It also bolstered its presence in Hong Kong’s media scene in April when it agreed to buy a stake in Phoenix Media Investment Holdings Ltd., owner of local broadcaster Phoenix TV.
Deliberations are ongoing and other state-backed entities could also consider submitting offers for SCMP, the people said. A deal may not materialize, they said.
An Alibaba spokesperson said the company is not engaged in discussions with any parties about the sale of SCMP and remains committed to the business.
Bauhinia and the Liaison Office did not immediately respond to requests for comment.
Any reports suggesting that Alibaba is considering a sale of SCMP are incorrect, Alibaba is fully committed to SCMP’s mission and business goals, and there are no plans for an ownership change, a spokesperson for the newspaper said.
A takeover of one of Hong Kong’s most influential media outlets by a state-backed company could further inflame tensions in the city, which was wracked by sometimes violent pro-democracy demonstrations until Beijing imposed a national security law last year that allowed the prosecution of many protesters and opposition politicians. As part of their crackdown, authorities also forced the shuttering of Next Digital Ltd., a newspaper publisher owned by one of the most-prominent activists, Jimmy Lai.
A sale would also be a further sign of how tech billionaire Jack Ma’s empire is being caught up in a broader tightening of control over China’s media. Last month, the country’s top economic planner unveiled a proposal which aims to bar private capital from news operations. The restrictions, which would apply only to domestic investments, come months after concerns were expressed in Beijing about Alibaba’s controversial handling of a scandal involving one of its executives.
The Liaison Office -- the Chinese government’s main office in the former British colony -- owns Bauhinia via its Sino United Publishing Holdings Ltd. unit, according to government records from March. General Manager Wen Hongwu is ex-secretary general of the Liaison Office, and chairman Mao Chaofeng is the former executive vice governor of China’s southern province of Hainan.
Read More: The Publishing Empire Helping China Silence Dissent in Hong Kong
Founded in 1903, SCMP was once one of the most profitable newspapers in the world, boosted by a large classified job-advertisement section. Media mogul Rupert Murdoch acquired control of the paper in 1986 before selling his stake to Malaysian tycoon Robert Kuok in 1993. The paper changed hands again in 2015 when Alibaba agreed to buy it in a HK$2.06 billion ($265 million) deal.
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