 |  |
For Immediate Release
Hong Kong, February 28, 2002 - TOM.COM LIMITED ("TOM", stock code: 8001) announced today that it has entered a definitive agreement to acquire 60% of the outdoor advertising business of New Star Prosperity Advertising Company Limited (New Star), the largest outdoor media company in Dalian, Liaoning province.
Under the agreement, TOM will pay about RMB67.73 million (approx. HK$63.89 million) for the purchase, out of which RMB19.20 million (approx. HK$18.11 million), or 28%, will be paid in cash and the remainder, approx. RMB48.53 million (approx. HK$45.78 million), via the issue of about 8.31 million new TOM shares at HK$5.51 each.
The agreement includes a New Star guarantee that its 2001 after-tax profit will not be less than RMB8 million. In the case of any shortfall more than 5% of the guaranteed 2001 after-tax profit, the total consideration paid by TOM will be adjusted proportionately.
In addition, there is a profit-sharing scheme: if New Star's 2002 audited after-tax profit exceeds RMB8 million and in 2003-2005 the company enjoys an annual 15% increase in its audited after-tax profit, its management will be entitled to a profit share which is equivalent to 20% of the amount in excess of RMB8 million in 2002 and the 15% profit growth in the subsequent three years.
The New Star transaction extends TOM's nationwide outdoor network to Dalian, an important stronghold for TOM's business expansion in China's northeast region. New Star's core outdoor media assets are unipoles, giant billboards and light boxes, with advertising space totalling more than 8,000 square metres. The company's outdoor media assets are achieving a high occupancy rate of 90%. In 2000, New Star had net revenue of RMB14.6 million and after-tax profit of RMB7.8 million. In the first six months of 2001, it recorded net revenue of RMB6.7 million and after-tax profit of RMB3.1 million.
Including this acquisition, TOM's nationwide outdoor media network now consists of eight companies. The network covers 22 cities, including two municipal cities, Beijing and Shanghai; and six provinces - Liaoning, Guangdong, Shandong, Sichuan, Yunnan and Henan. Its wide variety of outdoor media assets include billboard signage, neon signage, unipoles, street furniture (e.g. bus shelters, taxi stands and bicycle shelters), and bus-body advertising, etc.
TOM's eight outdoor companies currently have a total of more than 9,800 outdoor media units with a total advertising space in more than 134,300 square metres.
Mr. Sing Wang, Chief Executive Officer and Executive Director of TOM, said, "TOM aims to achieve a dominant position in this sector, with further acquisitions planned. We'll be aggressively identifying profitable companies with quality assets in key Mainland cities for acquisitions, to expand the nationwide platform further."
TOM has put in place a holding company, TOM Outdoor Media Group, to centralise management and unify the operations of assets of TOM's outdoor companies. With this centralised platform, TOM can centralise financial management, client and media databases, which will facilitate TOM's outdoor media sales team to offer national media planning and buying services for its corporate clients.
Mr. Li Peian, General Manager of New Star, said, "The consolidation of New Star into TOM Outdoor Media Group will immediately broaden our business prospective to a nationwide one. This is a very important step in the development of New Star in the long-term. With TOM's expertise in managing outdoor media companies, New Star would be able to continue to strengthen its operations while enhancing cost-efficiency."
According to some statistics, the outdoor media market in China has achieved a 30% compound annual growth rate over the past 10 years and outdoor advertising expenditure in China will total an estimated US$1.0 billion in 2003. TOM's continuous drive to expand its outdoor media business is to capture the huge revenue potential offered by the China market.
(Notes to Editors)
About New Star Prosperity Advertising Co. Ltd.
New Star Prosperity Advertising Co. Ltd. (New Star) was established in 1990 by Mr. Li Peian who is also General Manager for New Star. After 10 years, New Star has become Dalian's largest outdoor media company. Li has 18 years' media experience including 12 years in outdoor media.
As a modern coastal city and an important trading centre of Liaoning province, Dalian is likely to benefit from increased advertising spending by domestic as well as international advertisers in the wake of China's entry to the World Trade Organisation. New Star's major customers include both domestic and international advertisers, e.g. China Telecom, Jitong Telecom, CNPC, Shanghai Pudong Development Bank, Mitsubishi, etc.
About TOM.COM LIMITED
TOM.COM LIMITED (TOM) is a joint venture between Hutchison Whampoa Ltd., Cheung Kong (Holdings) Ltd. and other strategic investors. TOM was listed on the Growth Enterprise Market of the Stock Exchange of Hong Kong in March 2000 (stock code: 8001).
TOM has pioneered the cross media strategy, building a portfolio of online and offline media assets through acquisitions and organic growth. Its goal is to be the industry leader in each of its four business segments - sports marketing, outdoor media, print media and Internet portals. TOM is also building a strong platform to offer telecom value-added services.
(http://corp.tom.com/about/en/index.shtml)
####
For press enquiries:
Rachel Chan, TOM.COM LIMITED
Tel: (852) 2121 7810
Fax: (852) 2127 7576
Email: rachelc@hk.tom.com
| © Copyright 1996-2024 irasia.com Ltd. All rights reserved. |
|
DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any
information provided on this website. Under no circumstances shall irasia.com Ltd be liable
for damages resulting from the use of the information provided on this website.
TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website. |