Media Prima seeks control over New Straits Times

Reports say that the move will consolidate the company as the most powerful media group in the country.

Analysts in Malaysia have also pointed the move will allow Media Prima to incorporate fully the NSTP’s earnings into its accounts and to allow both companies to derive more benefit from each other.

Currently Media Prima is NSTP’s biggest shareholder with a 43.3 per cent equity stake. Based on the latest annual report, the second largest shareholder is the Employees Provident Fund (EPF) with 10.5 per cent followed by Kumpulan Wang Persaraan (KWAP) with 2.7 per cent. NSTP is listed on the stock exchange.

AmResearch said that the privatisation would transform Media Prima into a diversified media group with full control in operations of free-to-air TV, radio, outdoor and print segments.

NSTP’s core publishing business has been facing tough competition, especially in the English newspaper segment where The Star leads.

Prashant Kumar, CEO of Universal McCann in Malaysia, said that the news makes complete sense from a commercial point of view. “However, cultural assimilation and unlocking synergy values and scale benefits will be the true challenge for the management. From an advertising media point of view, cross-platform selling seems an immediate opportunity.”

According to Andreas Vogiatzakis, CEO of OMD Malaysia, the development might not be relevant for consumers as they differentiate only by content, not who is the owner.

“If NSTP continues its drive to revamp itself and offer the product that consumers want (so far New Straits Times has done well), it will continue to climb higher. For the competition, it will be a tough fight, of course, and it will give Media Prima a stronger hold on all media platforms. But only time will tell. I believe the DNA is good.”

A merger plan involving NSTP and Utusan Melayu (Malaysia) was mooted in 2006 but did not materialise.

Last year, NSTP sold off The Malay Mail to Dynahall, a joint venture company owned by Simpletech and Gabungan Kesturi. Simpletech is linked to Datuk Mohd Ibrahim Mohd Nor, who was formerly a major shareholder in Padiberas Nasional.