State-owned conglomerate Shanghai Media Group (SMG) has decided to merge its two listed units, creating a giant media stock in China’s A-share market, Shanghai Securities News reported Wednesday, citing a source with knowledge of the matter.
The two listed units— BesTV New Media Co. Ltd. (600637.CN) and Shanghai Oriental Pearl (Group) Co. Ltd. (600832.CN)— recorded combined net profit of 995 million yuan for the first half this year, according to regulatory filings.
Under the plan, SMG could inject some other quality-assets into the merged entity, the report said. The possible injections include film production firm SMG Pictures and online and TV shopping platform SMG-CJ Homeshopping, it said.
The restructuring of SMG follows Chinese President Xi Jinping’s call to establish several new-type media groups that are strong, influential and credible.
An unnamed investment banker was quoted as saying that, given the asset size, profitability and operational capacity, the merged new entity can lead the market. It could even gain the ability to compete with international entertainment giants like Disney and Times Warner, the banker said.
Shares of BesTV and Shanghai Oriental Pearl have been suspended from trading since May 29 ahead of the asset restructuring announcement. As the end of 2013, SMG had total assets worth 44.5 billion yuan, making it the largest provincial media group in China.
Xi means business on media revamp
Mainland media stocks soar on Xi revamp plan
New app creates buzz in China media landscape
– Contact us at [email protected]