Reclusive but politically connected Malaysian tycoon Syed Mokhtar Albukhary is expanding his media empire, buying an 11 per cent stake in Media Prima yesterday from former ruling party Umno.
Sources told The Straits Times that the magnate plans to up his holdings to a third of the company, which counts broadcaster TV3 and English daily the New Straits Times as part of its sprawling media business encompassing television, newspaper, radio and Internet and advertising.
It is understood that Tan Sri Syed Mokhtar, Malaysia's 12th richest man, intends to become the largest shareholder of Media Prima so he can consolidate it with his other less profitable media assets.
He controls business paper The Malaysian Reserve, digital television firm MYTV which has repeatedly run into funding problems, and about 15 per cent of ailing Malay language newspaper group Utusan Melayu.
"It will see cost savings and ease funding problems but it won't be straightforward if other shareholders baulk at taking in distressed assets," a source familiar with the tycoon's holdings said.
The 11.09 per cent stake in Media Prima which crossed off-market yesterday was sold by Gabungan Kesturi, an Umno-linked company.
According to Bloomberg data, the purchase cost RM73.81 million (S$24.2 million), or 23.7 per cent above the closing price of 48.5 sen per share yesterday.
Several sources said that Mr Syed Mokhtar will take up another 7.96 per cent of Media Prima shares owned by Umno, held through Altima Inc.
The single largest named shareholder in the group is financial firm Mitsubishi UFJ, with a 12.84 per cent stake that is believed to be held on behalf of Mr Syed Mokhtar.
Media Prima's next largest shareholder is the state-run Employees Provident Fund with 11.92 per cent.
Mr Syed Mokhtar rose to prominence after the 1997 Asian financial crisis and is now the biggest player in Malaysia's rice, sugar, ports, postal and power production sectors. His empire includes major engineering, construction and property businesses while his conglomerate DRB-Hicom controls national carmaker Proton.
He is known to be close to Prime Minister Mahathir Mohamad, who first served as premier from 1981 to 2003. After his retirement in 2003, Tun Dr Mahathir regularly worked out of an office on the premises of Mr Syed Mokhtar's Albukhary Foundation in Kuala Lumpur.
Since his Pakatan Harapan (PH) coalition won the election in May last year, Dr Mahathir has been keen to break Umno's hold over Malaysian news.
His chief troubleshooter Daim Zainuddin, who wields wide influence in the Mahathir administration, was forced in November to deny wanting to take personal control of Media Prima, as speculation swirled that the firm would be taken over by parties friendly to PH.
Faced with a loss-making media sector, cash-strapped Umno had this year surrendered most of its 49.77 per cent stake in Media Prima to former Umno MP Abd Aziz Sheikh Fadzir. Datuk Aziz is also the largest shareholder in the Utusan newspaper group.
A Malaysian government source said Mr Aziz is agreeable to a tie-up with Media Prima as he struggles to get Utusan off the stock exchange's list of financially distressed companies.
"He is onside with the plan and most of Media Prima's top management are aware," the source said.