Tuesday, May 27, 2008

Malaysian tycoon steps in where others fear to tread

Malaysian tycoon steps in where others fear to tread
28 May, 2008

Ananda takes stake in ailing UK publishing firm at a time when investors are wary

By Leslie Lopez, The Straits Times

BLOOMBERG
AT A time when many investors are leery of the prospects of the print-media business, globetrotting Malaysian tycoon T.Ananda Krishnan is quietly snapping up publishing companies.

Two weeks ago, he emerged as the white knight in a financial bailout of Johnston Press of the UK when his privately held investment company paid GBP77million (S$200million) for a 20 per cent interest in the debt-laden publishing house.

Mr Ananda says he is considering raising his holdings in Johnston Press - which owns influential Scottish daily The Scotsman and The Yorkshire Post - to just under 30 per cent in the coming months.

'This was a counter-cyclical investment. But we also see value in companies like Johnston because they form a fit to our overall businesses,' he told The Straits Times, adding that he was in the market to acquire other media businesses.

Mr Ananda presides over one of the few groups in Asia which have successfully melded telecommunications-delivery systems and content to establish an integrated multimedia business.

Ananda-controlled Measat satellites, which have a footprint covering Taiwan all the way to Australia in the south and westwards to India, beam programming from broadcasting studios of Astro All Asia Networks.

Astro is Malaysia's sole satellite television operator.

A rapidly changing media landscape has hit newspapers particularly hard over the years, because of falling advertising revenues.

Mr Ananda, who confesses to having a strong passion for the print-media business, has been eyeing opportunities in the sector for a long time.

During last year's bitter tussle for control of Dow Jones, the US publishing company which owns the Wall Street Journal, he had considered getting a group of friends to band together to rival the bid by Mr Rupert Murdoch.

But that plan did not take off.

At around the same time, Mr Ananda, who was recently named Malaysia's second-richest businessman by Forbes magazine, began eyeing other media opportunities, with Johnston appearing on his radar screen.

Johnston's problems stemmed largely from an acquisition spree that began in 2005, which pushed its debt burden to more than &pound700 million.

As the founding Johnston family struggled to meet the group's bank commitments, Mr Ananda emerged with a lifeline.

He acquired a direct stake from the family and subscribed to new shares issued by the company.

Mr Ananda's private investment arm Usaha Tegas currently controls a 20 per cent interest in Johnston, while the founding family's stake has been diluted to 7.6 per cent.

Mr Ananda intends to expand Johnston's digital media business.

'We believe that the company can become a regional media player,' he says.

Close associates say Mr Ananda would like to emulate the business model pursued by Australia's Fairfax Media and Rural Press.

The two companies announced a merger in December 2006 to create Australia's largest integrated metropolitan, regional and rural print and digital media business.

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