Korean cable TV operators seek to sell their channel suppliers in latest consolidation wave

2020.06.29 14:21:28 | 2020.06.29 14:21:55

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South Korea’s pay TV market is in for another big wave of consolidation as the M&A pipeline is swelling with not only cable TV operators and also their program suppliers.

Taekwang Group is seeking to sell its cable channel provider T-cast, according to multiple industry sources on Monday. The move comes fresh on the heels of the group’s sale of T-broad, Korea’s No. 2 cable TV operator, to SK Telecom in February.

T-cast runs multiple cable channels, including E Channel, Screen, Dramacube and the U.S. Fox network. Efforts to sell T-cast and T-broad in a package deal fell through last year, with SK Telecom agreeing to buy only T-broad. The estimated price for T-cast is said to be around 200 billion won to 300 billion won ($167 million-$250 million).

T-cast’s sales prospects have recently turned grim with the imminent launch of Disney’s new streaming service, Disney Plus, in Korea. Disney, which acquired 21st Century Fox last year, is reportedly considering ending Fox’s contract with the Korean cable channel provider to bolster its own offerings on Disney Plus.

D’Live, Korea’s third-largest cable operator that is also on the sales block, is separately seeking to divest its program provider IHQ. In February, it offloaded its 30 percent stake in Cube Entertainment to make itself more attractive to potential buyers. The stake sale brought D’Live’s price tag down to 900 billion won, with IHQ’s price set at about 400 billion won.

China’s Tencent and Korean entertainment firm Huayi Brothers have reportedly shown interest in IHQ. But while IHQ’s entertainment business is a major pull, its cable TV operations are a turn-off due to the nature of the heavily regulated industry, according to sources.

Hyundai Department Store is looking to sell Hyundai HCN, Korea’s No. 5 cable TV operator. It is also said to be considering sweetening the deal by pursuing a separate sale for Hyundai Media, a Hyundai HCN unit, to lower HCN’s selling price of 600 billion won. But industry observers say Hyundai Media is less attractive as it lacks media contents compared to its rivals.

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Korea’s pay TV market has been seeing massive consolidation led by the country’s three wireless carriers.

As of late 2019, KT and its satellite TV operator KT Skylife led Korea’s pay TV market with a 31.52 percent share. LG Uplus came second with a 24.91 percent share after acquiring Korea’s biggest cable TV operator CJ Hello last year. SK Telecom trailed close behind with 24.17 percent after merging its internet service unit SK Broadband with the No. 2 cable player T-broad.

The market is poised for another big shake-up as the remaining top five cable TV operators – D’Live, Central Multi Broadcasting (CMB) and Hyundai HCN – are also up for sale.

By Pulse

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