updated version
A fledgling media company, Nexnews Berhad, today expressed intentions to take over two major English language publications The Sun daily and business weekly The Edge .Nexnews said it has entered into a memorandum of understanding to acquire a 100 percent stake in Sun Media Corporation Sdn Bhd publisher of The Sun and two MoUs to acquire up to 70 percent of the Edge Communication Sdn Bhd publisher of The Edge .
The surprising announcement followed on the heels of The Sun owner Vincent Tan's confirmed purchase of a 26.15 percent stake in Nexnews yesterday.
Nexnews' proposed purchase involves a total buy-up of 110 million ordinary shares of RM1 of The Sun , and a purchase of 2.8 million shares of RM1 of The Edge . (See below)
However, the agreed-in-principle sale price of The Sun is RM40 million - at RM0.36 per share.
Meanwhile, 70 percent of The Edge is to be sold to Nexnews for RM14 million at RM5 per share.
Nexnews chief executive Tong Kooi Ong said in a statement that the proposed acquisitions are aimed at strengthening the company.
It is no secret in the industry that Tong has long yearned to create a media conglomerate.
An attempt last year for Nexnews to buy majority stakes in both publications had to be called off. It is believed that the deal fell apart when it failed to obtain the green light from the authorities.
Tan and Tong team
In the deal, Nexnews will buy a 65.3 percent stake in The Sun from Tan. It also proposed to acquire the remaining 34.7 percent shares from rest of the shareholders.
At the same time, Nexnews will acquire 50 percent of the Edge Communication from businessman Ahmad Abdullah, who is a director of Phileo Allied bank.
A third MoU will see Nexnews acquiring 20 percent of the Edge Communication from Tong.
The multi-million ringgit deal will see Tan appointed as a director of Nexnews. He will be invited to be the chairperson, while Tong will be the deputy chairperson and remains the company's chief executive officer.
Tong will retain a controlling interest in Nexnews by virtue of his owning 26.17 percent of the company, as compared with 26.15 percent owned by Berjaya Group chief Tan.
Nexnews was until Dec 28 last year known as Nexnews.com, which was jewellery company Gemtech Resources before Tong took over it in March 2000 and sought to turn it into a multimedia company.
However, his plan to buy The Sun and The Edge which he partly owns faltered last year.
Fate unknown
Today's announcement will be a relief for the embattled journalists in The Sun . It is however not immediately clear whether today's deal will change the fate of those retrenched.
Early this month, the newspaper axed 43 staff members, citing financial reasons for the retrenchment exercise.
The paper has been besieged with problems since it ran a controversial story on a plot to kill Prime Minister Dr Mahathir Mohamad and Deputy Prime Minister Abdullah Badawi. Several key editorial personnel either resigned or were suspended following the event, creating an upheaval in the editorial desk.
Staff members subsequently picketed and held candlelight vigils in protest of the suspension of their colleagues and the non-payment of contractual bonuses.
Meanwhile, it is learnt that in the wake of the latest developments, the National Union of Journalists has advised the Sun staff to hold off any pickets planned.
However, a handful of those retrenched will be filing an official complaint with the Labour Department in Kuala Lumpur tomorrow to challenge the "unfair dismissal" by the management.
Note : The figures were initially reported as "RM110 million buy-up of The Sun " and "a RM2.8 million purchase of 70 percent in The Edge ". The report has been corrected since.
