MCA about to take over Edge for RM180m?

ARCHIVES 2011

By admin-s On Jan 20, 2011

By uppercaise

The MCA’s investment arm Huaren Holdings is said to be close to sealing a RM180m deal to take over the Edge, the business weekly owned by former stockbroker and banker Tong Kooi Ong, once regarded as a key Anwar Ibrahim ally.

At the centre of the deal is Ho Kay Tat, chief operating officer and managing director of Star Publications (publisher of The Star) who was editor-in-chief and executive director of The Edge until lured to StarPub last year by new MCA president Chua Soi Lek’s team.

Huaren held a 40% controlling interest public-listed StarPub until it was ordered to sell its stake to the party last year for more than RM1.2bn. The party said the sale would allow Huaren to concentrate on investing in unlisted companies.

Kay Tat has also been boss of The Sun, owned by Vincent Tan and his son Robin, when Tong Kooi Ong went into partnership with the Tans by merging their media properties. The Sun had been bleeding red ink throughout its years under the Tans; it slowly began to climb out of the financial abyss after the merger with the Edge, when the new management turned the paper into a free-sheet and closed the Penang printing plant.

The Edge-Sun partnership broke up in 2008 when the Tan family decided to resume ownership of The Sun. There was market talk at the time that StarPub were keen on a takeover of the paper, by using it to cater for the lower-end of the market and allowing the flagship property The Star to move upmarket. This would ease some of the financial burden involved in produce The Star which was costing more to print than it fetched in circulation sales.

A takeover of The Edge, which is profitable but not on the scale of The Star, would give StarPub further options in the newspaper business; the paper is close to reaching market saturation, and circulation has been dropping, as with other traditional newspapers.

The takeover of The Edge is believed to involve Huaren Holdings, which is flush with cash after selling its 40% stake in public-listed StarPub to its ultimate owner, the MCA. The party president Chua Soi Lek had said that the sale was to allow Huaren to concentrate on investing in unlisted companies. The Edge, which is privately held, fits the bill.

The Star-Edge deal would follow in the wake of two recent media consolidations.