Lai set to sell struggling magazines

Top News | Phoebe Ng Jul 18, 2017
Media mogul Jimmy Lai Chee-ying is dismantling his media giant Next Digital by selling several of its magazines in Hong Kong and Taiwan following heavy losses over the past two years.

The publisher of Apple Daily newspaper said it had received an indicative HK$500 million offer from W Bros Investments, which is fully controlled by former Metro Daily newspaper boss Kenny Wee Ho.

Wee is best known as a restaurateur and for having married former beauty pageant queen Suki Chui Suk-man.

Lai, a pro-democracy supporter, had vowed four years ago not to sell his businesses and said that he did so he would be kai dai - or "nutty."

Next Media's trade union expressed disappointment yesterday, with some employees accusing Lai of going back on his promise.

Next Magazine editor-in-chief Louise Wong Lai-sheung shed tears before stepping into the conference room to hear the announcement.

She disagreed with the sale and described the move as "like putting the staff into a brothel."

The union also questioned whether the magazines could sustain their critical tone and quality due to Wee's suspected pro-establishment ties.

The takeover offer involves five of the group's magazines in Hong Kong and Taiwan - Next Magazine, Sudden Weekly, Face, ME! and Next+One, according to the group's statement to Hong Kong stock exchange.

Lai's group will pocket HK$320 million, while HK$180 million is to be injected into the five magazines.

To be retained under Next Digital's ownership are the Eat and Travel Weekly, Trading Express and EC Jobs magazines.

Next Media Group chief executive officer Cassian Cheung Ka-sing described the sale as "inevitable" when he informed employees yesterday.

"Mr Lai was saddened. But what needs to be done has to be done, so he said yes," Cheung said.

Cheung also said Lai's kai dai comments referred to selling the group rather than the magazines.

The flagship magazine, known for its investigative journalism on Chinese politics, will continue publishing.

Despite the group's strong social media presence, it had reported losses for two consecutive years amounting to HK$394 million in 2016/17 and HK$324 million the previous year.

The company's plans to outsource about 50 graphic design jobs sparked a protest early this month.

In an internal note, Cheung said yesterday the buyout is expected to be completed by September.

"The news industry has transformed from print publications to online publications in recent years," he said. "The sale is an important step in our digital transformation."

Wee has paid a sum of HK$10 million in earnest money and the exclusivity period will last until December 31, 2017 - meaning Next Media has agreed not to negotiate or accept any other deal until then.

Apart from demanding adequate arrangements for staff, the union also asked the new boss to safeguard editorial independence.

A union spokesman said Wee was a frequent visitor to Government House, provoking fears about press freedom.

The union was backed by Hong Kong Journalists Association, which also expressed concerns over the sale's impact on jobs and the magazines' editorial stance.

Next Digital shares were suspended yesterday morning, but edged up after resuming trade at 1pm.

Stocks have once been trading at 59 HK cents per share, hitting a 1.5-year high but met with resistance later.

Wee bought Metro Daily four years ago but sold it to an unnamed local financial institution for HK$400 million earlier this month.

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June 2018