TPG buys Chinese media company from Fox

The global private equity firm will invest about $214m in Phoenix Satellite Television, owned by a subsidiary of Rupert Murdoch’s 21st Century Fox Entertainment.

TPG has entered an agreement with Star Entertainment Holdings, a media company controlled by 21 Century Fox Entertainment, to sell its Chinese cable TV operator Phoenix Satellite Television Holdings, according to a company statement on the Hong Kong Stock Exchange. 

The global private equity firm agreed to buy 607 million of Star’s shares in Phoenix at HK$2.73 (€0.258; $0.35) per share, according to the statement, taking the total deal value to about HK$1.66 billion. 

TPG will own about 12.15 percent of the business after the transaction. 

Fox-owned Star had sold 264 million shares, representing a 5.3 percent stake, at HK$2.72 in March this year in a partial exit, with the latest sale representing a full exit of the company, media reports said at the time.

“The board of directors of the company does not expect the sale and purchase of the shares by Star Entertainment and TPG to have any significant impact on the business operations of the Company,” Phoenix said in a statement. 

The sale of Phoenix comes as media mogul Rupert Murdoch was re-elected chairman of 21st Century Fox, despite calls from shareholders that the chairman and chief executive roles be split. 

When there were attempts by a number of institutional shareholders to reform the governance structure and that wasn’t successful at the AGM, and we took into account the comments of the executive chair of the company, it made it very clear they were not interested.

Michael O'Connor, investment committee chair, First Super

Murdoch has previously come under fire from institutional investors in his home country of Australia for lack of corporate governance at the company, which was formerly known as News Corporation before Murdoch split the company’s assets into two groups – media and publishing. 

In January, Australian superannuation fund First Super revealed plans to divest all holdings in the business due to a lack of corporate governance, according to an earlier company statement. The Australian LP had repeatedly submitted proposals that called for News Corp to implement an independent chairperson and more independent directors, but they were ignored.  

“This is the first time we have taken this sort of action,” First Super co-chair and investment committee chair Michael O’Connor told Private Equity International earlier.  

“Normally we attempt to engage with company management on a constructive basis and we understand that appropriate reform on governance takes a bit of time. But in this case, when there were attempts by a number of institutional shareholders to reform the governance structure and that wasn’t successful at the AGM, and we took into account the comments of the executive chair of the company, it made it very clear they were not interested.” 

TPG’s investment in Phoenix comes just weeks after the firm sold Chinese leasing business UT Capital to Haitong Securities in a $715 million deal, PEI reported earlier. TPG initially invested in the company in 2008. The firm owned 100 percent of the business, whose main operating subsidiary is UniTrust Finance & Leasing Corporation, and has since grown total assets of the company at about 55 percent per year.

The firm is currently raising a $3.5 billion Asia fund, which was rumoured to be planning a second close on $2 billion in June this year, media reports said earlier. The firm was originally targeting $4 billion, but decreased the target.