SINGAPORE - Singapore Press Holdings plans to divest its 20 per cent stake in Mediacorp TV and 40 per cent stake in Mediacorp Press, the publisher of the Today newspaper, for $18 million, the firm said on Friday (Aug 25).
The proposed divestment follows Mediacorp's decision to cease the print edition of Today.
SPH CEO-designate and executive director Ng Yat Chung said the deal would also allow SPH to focus on its core media business.
"Free-to-air television is not core to SPH's business and the divestment of the stake in Today follows Mediacorp's decision to turn it into a fully digital product," he said in a statement.
"This rationalisation will allow us to focus our energies on serving our audience and advertisers best through a suite of strong media products across the print, digital and radio platforms."
SPH's editor-in-chief of the English/Malay/Tamil Media group Warren Fernandez added: "The Straits Times and its sister papers, The New Paper and Business Times, will redouble our efforts across our print, online and mobile platforms. We will not let up and will strive to ensure that readers in Singapore remain well served."
SPH CEO Alan Chan noted that SPH has recouped its investment in Mediacorp Press and Mediacorp TV, after taking into account the consideration of $18 million and the dividends received over the years.
The deal is likely to be completed at the end of September and SPH expects to record a writedown of about $31 million in its books. However, this follows the earlier-announced sale of the online classifieds business 701Search, on which SPH is expected to recognise a profit of about $150 million.
The deal comes 12 years after SPH purchased the stakes as part of a media industry asset consolidation in 2005. During the consolidation, SPH transferred a TV channel to Mediacorp and took a 20 per cent stake in Mediacorp TV.
SPH also merged its free newspaper Streats with Today, and invested in a 40 per cent stake in Mediacorp Press.
As part of the deal announced on Friday, Mediacorp will also stop publishing any soft copy or computer-readable format of Today that has the look and feel of a hardcopy version of the newspaper, for a period of five years.
In a statement, Mediacorp said that it will restructure the Today business to "better face the new digital-first media landscape".
The move follows Mediacorp's decision in April this year to launch a fully digital weekend edition, ceasing the print edition of its weekend paper.
The discontinuation of Today's print edition means that about 40 roles will become redundant, Mediacorp added.
It said will explore options to redeploy the staff in these positions to other roles within the company, but where this is not possible, eligible staff will be offered severance packages and outplacement support.