26 October 2016
Robert Kuok (left) signalled the stake sale to a Singaporean newspaper but an SCMP story on Thursday did not mention Jack Ma (right) as the potential buyer. Photos: Bloomberg, Reuters
Robert Kuok (left) signalled the stake sale to a Singaporean newspaper but an SCMP story on Thursday did not mention Jack Ma (right) as the potential buyer. Photos: Bloomberg, Reuters

Jack Ma chasing SCMP: How Kuok let the cat out of the bag

When the South China Morning Post confirmed reports about a proposed stake purchase with its own front-page story on Thursday, it appeared everyone but itself knew the buyer was either Alibaba Group or its high-profile chairman, Jack Ma.

SCMP Group, the company that publishes the newspaper and other titles, stopped short of naming the assets involved in the offer in a filing to the Hong Kong stock exchange.

But chief executive Robin Hu had told staff in an internal memo that the assets include the newspaper, magazines and outdoor media, custom publishing and the events business.

Meanwhile, the Wall Street Journal is reporting that Ma is in talks to take a controlling stake.

If the deal is consummated, SCMP Group will be left mostly with cash and property assets including an undeveloped Clearwater Bay luxury residential site co-owned with Fosun International Ltd. (00656.HK).

SCMP Group, which has been suspended from trading since February 2013 because of insufficient public float, confirmed the media asset sale after chairman Robert Kuok spoke with Singapore’s Straits Times on Wednesday.

“Where I am concerned, if SCMP (Group) feels that the time has come to offload their shares, it’s a business decision. We have no influence over politics,” Kuok was quoted as saying.

Kuok, 92, is the patriarch of the family empire which spans property, hotels, logistics, household oil and others businesses.

The Singapore paper also quoted two former SCMP staffers as saying the asset sale by the 112-year-old newspaper is a political decision that needs Beijing’s blessing because of the publisher’s “unique position in Hong Kong”.

Since World War II, previous owners of SCMP held their stake less than 25 years.

Founded by Tse Tsan-tai and Alfred Cunningham in 1903, the paper was controlled by HSBC after the war. It was first listed in Hong Kong in 1971.

Tycoon Li Ka-shing sold a 35 per cent stake to Rupert Murdoch in 1986 for a reported US$105 million.

Later, Murdoch bought Dow Jones’ remaining 18.9 per cent stake for US$57.2 million before privatizing the company in 1987. The stock was relisted in 1990.

Three years later, Murdoch sold his 35 per cent stake to Kuok for US$349 million.

The stock was admitted as a Hang Seng Index constituent in 1994 when SCMP was considered the world’s most profitable newspaper.

The changeover of Hong Kong to China from British sovereignty in 1997 was a turning point.

Since then, SCMP has struggled to grow its daily circulation above 100,000.

Operating profit fell from a peak of HK$650 million (US$83.87 million) in 2000 to just HK$2 million in 2003, the year of SARS.

Now, hopes are high that new investment will restore the glory days of SCMP, especially among the new generation.

But by no means is it a done deal. SCMP Group described the negotiations as being at a “very early stage”.

Meanwhile, Hu is trying to reassure employees, saying his understanding is that the potential buyer likes to see continuity in the group’s operations.

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EJ Insight writer

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