Carlyle trying again for Kbro sale

Rose Major | 27-07-2010

Private equity group Carlyle is again looking to offload its investment in Taiwanese cable operator Kbro after a deal agreed last year fell through.

The prospective buyer this time is the Tsai family, which also controls Taiwan Mobile – last year’s failed acquirer.

Back in September 2009, Taiwan Mobile agreed to buy Carlyle’s 1.1 million-subscriber cable operator in a deal worth TW$32.8 billion (then around US$1 billion). Carlyle would have received 15% of Taiwan Mobile in exchange.

But regulation got in the way of the deal, with the government’s indirect stake in Taiwan Mobile through a financial company the issue. Under Taiwanese law, the government is not allowed to own stakes in media companies.

This time, according to reports, Carlyle has agreed to sell Kbro to the Tsai family for TW$65-70 cash, with the family also taking on Kbro’s TW$20 billion in debt.

With Taiwan’s government considering amending the law to allow companies in which the government has a stake to own up to 10% of media companies, the Tsai family could roll Kbro into Taiwan Mobile at a later date.

Kbro, formerly Eastern Multimedia Company, is Taiwan's largest MSO with 12 cable TV systems numbering 1.1 million subscribers. The Tsai family already control a small Taiwanese operator, TFN, with around half a million subscribers.