Carlyle/Taiwan Mobile deal deadlocked

Regulatory concerns remain unresolved. Both parties will seek other ways to go forward with the deal which would have seen Carlyle's Kbro sold to the mobile carrier for TWD440m and a 15.5 percent company stake.

The deadline for an agreement between Taiwan Mobile to buy cable television operator Kbro from private equity firm Carlyle via a share swap deal has passed without any resolution, a company spokeswoman confirmed to PEI Asia.

The US buyout firm had initially sought to exit its stake in Kbro to the Taiwan Stock Exchange-listed mobile carrier for TWD440 million (then €9 million; $14 million) and a 15.5 percent stake in September last year. But the deal was delayed due to local legislation which prohibits government entities from owning stakes in media companies.
The Taipei city government indirectly owns a stake in Taiwan Mobile through its holdings in Fubon Financial, a parent company of the mobile phone operator.
The spokeswoman said that both parties would continue to explore other avenues in which to complete the deal.
Carlyle acquired kbro for an undisclosed sum in 2006. The investment was made out of Carlyle Asia Partners II, which closed on $1.8 billion in July 2006.
Kbro is not Carlyle’s first investment in Taiwan’s cable television sector. In 1999, the firm is understood to have invested about $171 million to create Taiwan Broadband together with Taiwanese conglomerate Shin Kong Group.
In 2005, the firm sold its stake in Taiwan Broadband Communications to Macquarie Media Group and Macquarie Bank for A$1.2 billion (then $1 billion; €712 billion).