24 October 2018
Next Digital is selling most of its magazine business in Hong Kong and Taiwan to an entity controlled by businessman Kenny Wee Ho. Photo: HKEJ
Next Digital is selling most of its magazine business in Hong Kong and Taiwan to an entity controlled by businessman Kenny Wee Ho. Photo: HKEJ

Former Metro Daily boss to buy Next Magazine in HK$500 mln deal

Next Digital Ltd. (00282.HK), the publishing firm founded by maverick tycoon Jimmy Lai and formerly known as Next Media, announced on Monday that it has accepted an indicative HK$500 million offer for its magazine business.

The company said in a stock-exchange filing that it is selling most of its magazine operation in Hong Kong and Taiwan to W Bros. Investments, an entity owned by former Metropolis Daily boss Kenny Wee Ho.

Under the proposal, Wee’s firm will pay HK$320 million to Lai and inject HK$180 million into the business being acquired. 

The deal involves Next Magazine and four sister publications, namely Sudden Weekly, Face, ME! and Next+One.

Wee is said to have paid HK$10 million as earnest money, the Hong Kong Economic Journal reports. 

The deal is expected to be completed by the end of September. If Next Digital enters into any transaction with another party before the end of 2017, it will have to return Wee the earnest money and pay an additional HK$10 million as liquidated damages.

Following the announcement of the sale of struggling magazine business, Next Digital shares soared after resuming trade in the afternoon session on Monday. At one point, the stock was up as much as 59.5 percent from Friday’s close, before paring the gains and ending 17.6 percent higher.

Next Digital has posted financial losses in the last two years. The company was at the center of a controversy recently when it announced plans to outsource editorial and production work for the publishing business, which includes the flagship Apple Daily newspaper.

Founder Lai feels sad about the sale of Next Magazine, but has accepted that it is in the best interests of the company, media reports quoted Next Digital CEO Cassian Cheung as telling staff. 

The new owner, Kenny Wee, meanwhile is said to have assured that there won’t be any drastic changes at Next Magazine in the short run.

Wee will reportedly assign a team he poached from Next Magazine two years ago to lead the magazine, and also plans to hire more reporters.

According to Cheung, no discussions were held over the sale of Apple Daily in Hong Kong and Taiwan.

But he said he can’t make any promises as to how long the company will keep the newspaper’s print operation going, and whether it will turn digital-only.

The fate of the printed newspaper will depend on the market environment, he said, but added that there is unlikely to be any significant change at least in the next two to three years.

Earlier this month, Wee sold the Metropolis Daily to a local financial firm for HK$400 million, doubling the investment he made when he bought the free-newspaper in 2013.

Apple Daily quoted activist investor David Webb, who owns some stake in Next Digital, as saying that Next Digital could still attract bids from other parties, and that he doesn’t rule out someone else close to Beijing snatching the deal from Wee’s hands.

According to Apple Daily, as many as 400 employees from Next Magazine’s operations in Hong Kong and Taiwan could be affected by the proposed sale.

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