Pearson chases TV stake in Hong Kong

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The Independent Online
PEARSON is expected to follow up its pounds 99m acquisition of Thames Television by taking a stake in Star TV, the Hong Kong-based Asian satellite television service half-owned by Li Ka-shing, Hong Kong's richest man.

Pearson, which already owns the Financial Times, Royal Doulton and Lazards, is expected to pay up to pounds 100m for a minority stake in Star, which reaches an estimated 41 million people in Asia.

Last week, Frank Barlow, Pearson's managing director, said the group intended to buy a Continental or Far Eastern television broadcaster when it announced its agreed bid for Thames. He described Thames - Pearson's second foray into television after its backing for British Sky Broadcasting - as a base from which to expand.

Mr Barlow said: 'If Mr Li is interested in selling a stake, we are interested in buying it.'

A source close to Pearson said the group was also likely to announce another TV deal, possibly in Australia.

Star TV's footprint stretches across 38 countries, from Turkey to Japan, via India. It reaches an estimated 11.5 million households, and its audience is said to be growing at the rate of 20,000 a day. It is half-owned by Mr Li, and half by Hutchison Whampoa, the company of which he is chairman. Pearson, which also owns the Financial Times and Madame Tussaud's, holds 14 per cent of Yorkshire-Tyne Tees Televison and 17 per cent of BSkyB, some of it indirectly.

As a newspaper publisher and - now with the Thames acquisition - a programme maker, Pearson is restricted from owning more than 20 per cent of a UK broadcaster. Mr Li put an estimated USdollars 500m ( pounds 320m) into the launch in 1991 of Star - an acronym for Satellite Television Asia Region - but the company is not yet making a profit.

It has been looking for an English- language partner for some time to inject cash, technical expertise, and to strengthen its popular English-language programming. Negotiations with Rupert Murdoch, who owns the South China Morning Post, the Hong Kong English-language newspaper, are said to have foundered after he demanded a controlling stake in Star TV.

The search for a partner is becoming more urgent as Star gears up for its biggest financial investment since its launch: a pay-TV system. So far, Star's six channels, which include a news service provided by the BBC's World Service, have been free to viewers. Anyone with the correct receiving equipment can pick up the programmes, and Star's revenue has come through advertising.

But Julian Mounter, Star TV's new chief executive - an Englishman who took over recently from Mr Li's son, Richard - has the task of preparing the company for encryption of its programmes, due to begin in October. Customers will have to buy decoders to unscramble Star's signals on six new channels.

Mr Mounter was a journalist on the Times before he joined Thorn EMI (the previous owners of Thames).

(Photograph omitted)

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