PETALING JAYA: Media-shy Tan Sri Syed Mokhtar Al-Bukhary is the new media mogul in town, after he is believed to have acquired a major stake in the country’s largest media group, Media Prima Bhd, for about RM74mil.
Sources told StarBiz that the billionaire bought an equity interest of 11.09% in Media Prima from Gabungan Kesturi Sdn Bhd in an off-market deal on July 2. Gabungan Kesturi is wholly owned by trustee company Amanah Raya Bhd, which, in turn, is wholly owned by the government.
With the acquisition, Syed Mokhtar has added yet another media company to his stable, other than TMR Media Sdn Bhd - the publisher of The Malaysian Reserve - and Utusan Melayu (M) Bhd.
Speculation has also risen on whether Syed Mokhtar is mulling a mega-merger of media players in Malaysia, putting together several key national newspapers including the New Straits Times, Berita Harian and Utusan Melayu under one umbrella.
Some 13 years ago, a similar proposal was mooted to merge New Straits Times Press (M) Bhd and Utusan Melayu.
However, the proposal was aborted less than two months after negotiations commenced, following stiff opposition within Umno, with many fearing a monopoly would emerge.
According to Bloomberg data, a block of 123.02 million shares in Media Prima was transacted on July 2, at the price of 60 sen a share.
This represents a premium of 23.7% to the stock’s closing price of 48.5 sen.
It is speculated that the 11.09% stake of Gabungan Kesturi was held by Amanah Raya on behalf of Umno. The political party still retains a 7.96% stake in Media Prima after the share sale, held through Altima Inc.
In March this year, Umno deputy president Datuk Seri Mohamad Hasan told an online portal that the party would be disposing its stake in Media Prima due to its monetary constraints.
Earlier in February, Umno sold its 31.6% equity interest in Bahasa Malaysia daily publisher Utusan Melayu for a total of RM6.65mil.
According to sources, The Edge Media Group’s Datuk Tong Kooi Ong had also been approached to acquire a stake in Media Prima. However, the negotiations did not materialise.
Syed Mokhtar’s decision to widen his exposure in the media segment raises questions, considering the sector’s challenging business environment currently.
However, a source said that the tycoon’s entry into Media Prima was not entirely surprising, as there are plans to link MYTV Broadcasting Sdn Bhd and Media Prima.
MYTV, which is owned by Syed Mokhtar via Puncak Semangat Sdn Bhd, was the broadcast service provider that was selected back in 2014 to spearhead the national digital terrestrial television rollout, known as myFreeview.
“MYTV has difficulties in gaining traffic in terms of viewership. Pay-TV operator Astro and other over-the-top service providers such as Netflix and iflix have made the market more competitive.
“To be attractive to viewers and gain market share, MYTV needs more fresh new content. This is where Media Prima will come in, offering new content for MYTV in the future and bringing in synergistic benefits,” he said.
Media Prima is involved in a wide range of media-related businesses in television, print, radio, out-of-home advertising, content and the digital media.
The group currently owns three newspapers (New Straits Times, Berita Harian and Harian Metro), four free-to-air TV channels (TV3, ntv7, 8TV and TV9) and four radio stations (Fly FM, Hot FM, One FM and Kool FM).
Media Prima also owns Primeworks Studios, which is Malaysia’s largest content production company.
Currently, Mitsubishi UFJ Financial Group is the single largest shareholder in Media Prima with a stake of 12.84%.
Through Morgan Stanley & Co LLC, Mitsubishi UFJ emerged as a substantial shareholder in Media Prima in April 2017 and has gradually upped its stake.
Syed Mokhtar’s current media businesses, namely, Utusan Melayu and The Malaysian Reserve, have been struggling financially. According to their latest available financial results, both companies are in the red.
In the financial year 2018 (FY18), Utusan Melayu reported a widened net loss of RM186.62mil.
Meanwhile, TMR Media recorded a loss of RM4.41mil in FY17.
It is worth noting that in recent years, TMR Media has been revamped to better attract business readers, mimicking financial daily The Edge.
Syed Mokhtar’s venture into Media Prima may not be a walk in the park. While the company managed to turn around last year after two consecutive years of losses, it was largely due to a one-off gain from the sale of property. The media group’s newspapers have also been affected by declining circulation, which, in turn, has impacted revenue.
Media Prima began its FY19 with a wider net loss year-on-year. The company recorded a net loss of RM40.41mil in the first quarter on a lower revenue of RM239.1mil.