Business Times Singapore chose to highlight some critics on the pending NSTP corporate restructuring. I think the fact that the share price has been so far away from its NTA really showed that nobody wants to hold the stock as it is. What is more important is that the minority shareholders are not mistreated in any major corporate restructuring.
KUALA LUMPUR, Sept 25 — Criticism in cyberspace is mounting against a plan to privatise the country's most established publishing company, the New Straits Times Press (NSTP).
The plan, which was presented to NSTP's board a month ago, proposes that free-to-air television station Media Prima completely take over NSTP through a share swap. In the process, NSTP will be delisted from the stock exchange.
Media Prima is NSTP's single largest shareholder with a 43.3 per cent interest. The other large shareholders include the Employees Provident Fund (EPF) and another state agency which together hold around 13 per cent.
The sticking point could be Media Prima's ownership. Its single largest shareholder is private company Gabungan Kasturi, which is owned by business nominees of Umno, the dominant political party in the ruling Barisan Nasional. As a result, top editors of the paper have always been appointees of the prime minister of the day.
Writing in his blog on Wednesday, Datuk A. Kadir Jasin, a former editor-in-chief of NSTP who still has strong Umno links, called the plan a “plot” to use “the goodwill and stronger financial position of NSTP to shore up” Media Prima.
Kadir argued that the publisher's brand name “must never be allowed to be destroyed or undermined”.
Blogger Ahiruddin Atan, the editor of the Malay Mail tabloid, wrote yesterday that the move could provoke a political backlash against Prime Minister Datuk Seri Najib Razak. He said that the plan “would provide his detractors with the firepower to accuse Najib Razak of trying to put the media under his direct control”.
For all the criticism, however, the deal is likely to go through as Najib is said to be amenable to the idea. More to the point, the main minority shareholders — the EPF and the other state agency — have endorsed the plan. The only remaining hurdle remains consent from Umno's powerful political bureau which will meet some time this week to consider the plan.Analysts generally agree that the deal favours Media Prima as the underlying value of the newspaper group is more than twice the value of its debt-heavy controlling shareholder. Even so, NSTP has not been performing: its share price (RM2.15 yesterday) has been below its net asset value (RM4.52) for the longest
The deal would also transform Media Prima, which owns all of the country's free-to-air television stations, into Malaysia's most powerful media company and allow it unhindered access to all of NSTP's earnings.
The newspaper group has relatively low debt but has increasingly seen its fortunes flagging. Once the premier English-language daily, its flagship publication the New Straits Times has seen its circulation plummet amid declining advertising revenues. The NST's circulation is just under 120,000 now from its peak of 280,000 in the 1980s.
Indeed, NSTP's earnings are now largely driven by its Malay publications, Berita Harian and Harian Metro, a racy tabloid with the highest audited circulation in the country. The group reported a net profit of RM47.4 million for the year to Dec 31, 2008.
Media Prime, meanwhile, reported a net profit of RM86 million for the same period. — Business Times Singapore
p/s photo: Maggie Cheung