CJ shareholders approve mergerShareholders of CJ HelloVision, the nation’s top cable TV network, approved a merger with SK Broadband in a landslide decision three months after the move was first suggested.
The market had predicted that shareholders including CJ O Shopping, the largest with a 53.9 percent stake, would favor the proposal by SK Telecom (SKT) to buy out the company.
According to CJ HelloVision, 75.2 percent of shareholders showed up at the meeting that took place at its headquarters in Sangam-dong, Mapo District, western Seoul, on Friday. Of those, 97.1 percent voted in favor of selling the company to SKT to be later merged with the wholly-owned subsidiary SK Broadband, an Internet protocol television (IPTV) service operator. The merger of the two companies is set for April 1.
“We will work on contributing to the nation’s broadcasting industry while improving consumers’ value through aggressive investment and innovative services,” said Kim Jin-seok, the CEO of CJ HelloVision.
Shareholders opposed to the acquisition, who control 1.66 percent of the company, may choose to sell at 10,696 won ($8.70) per share until March 17.
With the shareholders’ approval, the only step left for the merger to be completed is to receive licensing approval from the government.
Currently, the Ministry of Science, ICT and Future Planning, the Korea Communications Commission and the Fair Trade Commission are reviewing the legality of the plan. The decision is expected to be announced within the first half of this year.
If the government does not approve, the merger could be cancelled.
In fact, rivals KT and LG U+ have been urging the government to do just that.
The two smaller mobile carriers released a joint statement on Thursday calling the shareholders meeting illegal. They claimed that holding a vote before the government handed out the license is a clear violation of the Broadcasting Act and Telecommunications Business Act.
“The government is still in the screening process for the merger and acquisition and has not yet issued approval,” the two said in the statement. “[The meeting] was a means of pressing the government.”
However, CJ HelloVision maintains the meeting was by the books.
“We have already announced through our corporate disclosure that the whole process could be invalidated if the government disapproves of the plan,” the company said in a statement.
The merger between CJ HelloVision and SKT is expected to increase the competitive edge of the country’s No. 1 mobile carrier, as it would allow SKT to create discounted packages that combine cable channels with telecommunication services.
KT is currently the market’s No.1 IPTV service provider, with 8.12 million paid subscribers. SK Broadband has just 3.14 million, but after the merger with CJ HelloVision, that margin would narrow substantially, with SK Broadband’s subscribers totaling 7.3 million.
BY PARK SU-RYON, KIM JEE-HEE [email@example.com]
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