Pacific Century CyberWorks (PCW, PCWKF) Message Board

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Technology Stocks : Pacific Century CyberWorks (PCW, PCWKF)

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To: ms.smartest.person who wrote (2392)	9/10/2000 11:16:35 PM
From: ms.smartest.person	Read Replies (1) of 4541

Control row behind end of CyberWorks deal HUI YUK-MIN Pacific Century CyberWorks has confirmed that a joint venture with Taiwan's sole Internet service provider GigaMedia has collapsed due to disagreement over shareholding structure and valuations. GigaMedia said last week it was pulling out of a venture with CyberWorks and Taiwan entertainment-content company ERA Communications to provide Chinese-language Internet content. Robert Chan, chairman of CyberWorks' Greater China business, said yesterday GigaMedia - the broadband Internet unit of conglomerate Koo's Group - was dissatisfied with taking a minority stake in the venture. "GigaMedia wanted to take a majority stake because they believed they could have at least the same contribution to the content joint venture as CyberWorks," said ERA chairman Chiu Fu-sheng. Under the three-way joint venture announced in May, GigaMedia and CyberWorks agreed to invest US$50 million each to acquire an 8.9 per cent stake in ERA from Mr Chiu. GigaMedia was to form a 55:45 content-distribution joint venture with ERA that would then form a content-provision joint venture owned 55 per cent by CyberWorks. This meant GigaMedia would have had an indirect minority stake of only 24.75 per cent in the content joint venture. Mr Chan said GigaMedia later demanded a majority stake in the content joint venture, while CyberWorks also insisted on a controlling stake. Valuation of GigaMedia and ERA's stake in the venture had also been a sticking point. Following the collapse, CyberWorks plans to form a new 55:45 joint venture with ERA alone, Mr Chan said. CyberWorks will pay US$50 million for an 8.9 per cent stake in ERA from Mr Chiu, while CyberWorks and ERA will each invest about US$10 million in the new joint venture, which is expected to launch Chinese-language content in January with annual production of about 700 hours of video programmes. CyberWorks said last week it would "accelerate co-operation" with GigaMedia despite the collapse of the joint venture. However, CyberWorks officials yesterday appeared to rule out the possibility of an equity partnership, with talks now focusing only on distribution agreements. Executive vice-president Raymond So said CyberWorks was in talks to distribute the company's multi-media content services Network of the World (NOW) through GigaMedia's broadband network in Taiwan. Content production and distribution of NOW's services through Koo's Group's cable-TV network were not involved, he said. "We are now in talks with a newly formed distribution agent to distribute our services into the Taiwanese market," said Mr So. He said the distribution agent - formed by Taiwan's four dominant cable-TV networks - would allow NOW services to reach to all of Taiwan's paid-TV households instead of being limited to Koo's Group's cable TV networks. "This allows us to have greater flexibility in distributing our content and the new joint venture's content," said Mr So. CyberWorks shares plunged 4.69 per cent on Friday in the wake of the GigaMedia pullout. scmp.com

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