NEWSPAPER TAKEOVER BIDS: Matichon founder in desperate fightback

Published on September 14, 2005 - Paiboon promises not to interfere with management of ‘Matichon’ or ‘Bangkok Post’

Stunned by a hostile takeover bid, Khanchai Boonpan, the founder of Matichon Plc, is putting up a fight to safeguard the newspaper’s editorial independence.

Yesterday he held talks with senior staff and allies before garnering some 31 per cent of shareholders’ support. A source said Khanchai tried to calm nerves among the editorial staff over the takeover bid launched by entertainment tycoon Paiboon Dam-rongchaitham.

“He told the staff not to panic,” the source said.

Paiboon shocked the media industry and Khanchai in particular by announcing a takeover bid to buy up 100 per cent of Matichon Plc. Overnight he has transformed himself into an entertainment and media tycoon with the audacious bid.

Matichon, which is listed on the stock market, is the publisher of Matichon daily, Khao Sod daily, Prachachart Turakij and other publications.

Paiboon, through GMM Me-dia Plc, a subsidiary of the GMM Grammy Plc, has already spent Bt733.29 million to acquire a 32.23 per cent stake in Matichon. He acquired his sizeable stake by buying shares mostly from foreign funds which had been idly holding Matichon stocks.

GMM Media and Paiboon will move on to make a tender offer, as required by the securities law, to allow other shareholders of Matichon to sell their shares to them. This means that they can theoretically build up their stake in Matichon to a full 100 per cent.

Paiboon also announced a bid to acquire up to 23.6 per cent in Post Publishing Co, publisher of the Bangkok Post, Post Today and other publications.

Sommai Parijchatt, managing director of Matichon, issued a vague statement, raising concern about the future direction of the company. He did not elaborate on what Matichon would do next.

But he said Matichon had never experienced a takeover bid before and could not assess the impact of the bid on its future operations. Nonetheless, he promised that that Matichon, the publishing group well known for its hard-hitting political coverage, would strive for professionalism and editorial independence.

After the board of GMM Media approved the buy-out deal for Matichon and Post Publishing on Monday, Paiboon tried to reach Khanchai by telephone.

There were was heaving trading – more than Bt1 billion – on the stock exchange in shares of both the Matichon and Post Pub-lishing. Altogether, Paiboon and GMM Media plan to spend almost Bt3 billion to take control over Matichon and Post Publishing.

When Khanchai learnt that Paiboon had built up his stake in Matichon to 32 per cent, he was stunned. Later in the day, he, Thakun Boonpan, editor of Khao Sod, and Sommai went to meet Paiboon. Details of the talks were not disclosed.

But Paiboon said: “Phi Chang [Khanchai’s nickname] said he has no problem with GMM Grammy’s holding stocks in Mati-chon.”

However, Paiboon’s account would have to be further qualified as Matichon’s statement clearly indicates that the company is assessing the impact of the bid on its future course.

The atmosphere at Matichon’s office was rather hectic as reporters were informed that Paiboon would appear there in the afternoon to hold a news conference. But there was no news conference at Matichon and camera crews and reporters were blocked from entering the door of the building in the Prachachuen area.

Paiboon is known to have a very close relationship with Prime Minister Thaksin Shinawatra. One well-known lawyer said Paiboon is not acting as a proxy for anybody in his buy-out bids for the two publishing firms.

“He has an ambition to enter politics, so he would like to have some publishing firms in his hand,” the lawyer said.

Paiboon yesterday held a news conference at his office and sought to play down fears that he might interfere in the editorial independence of both Post Publishing and Matichon. He said he would give the two firms a free hand to run their editorial departments and would only focus on talks with the management or the boards on marketing and how to establish synergy between the publishing business and his entertainment business.

“I would allow the editorial teams of Matichon to continue their work uninterrupted. There won’t be any reshuffle of staff or layoffs. There won’t be a merger between Post Publishing and Matichon. Everything will be the same,” Paiboon said.

Suthikiati Chirathivat, who holds about 11-15 per cent in Post Publishing, has been away in the United States, where his son is attends university. Paiboon reportedly invited Suthikiati, chief executive of Post Publishing, for a meal at the GMM Grammy’s office earlier to discuss the take-over plan.

Suthikiati adamantly refused to sell his stake. But he could not prevent other members of the Chirathivat clan from unloading shares. Before Monday’s transactions, the Chirathivats altogether held about 30 per cent in Post Publishing.

Paiboon has spent Bt972.2 million to buy a 23.6 per cent share in Post Publishing, mostly from Chirathivat family members and from Italian-Thai Co, which had been holding a stake of 9-10 per cent.

Paiboon also extended an olive branch to Suthikiati by saying that he would wait for his return to Thailand on September 18 before they would discuss the management of Post Publishing.

“Like the case of Matichon, I would not interfere in their business,” he said. “I would only focus my discussion on how Grammy could help out Post Publishing in marketing, where we have expertise.”