Hong Kong's largest television broadcaster TVB denies rumors that Run Run Shaw, the founder of the TV station, is in talks with Country Garden's chairman Yeung Kwok-keung to sell 26 percent stakes at no less than HK$10 billion.

The chairman opened the company's annual general meeting (AGM) yesterday, swarmed by reporters and flashing cameras. Shaw didn't answer to the barrage of questions about the reported TVB stakes sell-off to Yeung.

Shaw was escorted by a wall of security guards, creating a stir in the hotel lobby where the AGM was held.

The intense interest in the deal is understandable, as once it is done, Yeung, a successful mainland property developer, will become the largest shareholder in one of the most widely watched TV stations in Hong Kong.

Both TVB and Shaw's other listed company Shaw Brothers, issued clarification yesterday calling stories in the press regarding an acquisition of the company "incorrect and speculative in nature".

Rumors that Shaw might consider disposing some of his stakes in TVB had been in circulation for some years. However, recently media reports named Yeung as the successful bidder, ousting private equity firms like Carlyle and Blackstone.

The news of the potential sale had an impact on the shareholders of the company yesterday. One shareholder of the company, who refused to be named, asked the management during the AGM whether TVB should refrain from selling to a company in debt. His question, however, was met with a harsh response from executive deputy chairman Norman Leung.

"Your question is inappropriate, and I don't have to respond to it," Leung said. He explained that the company management has no power over the actions of any of its shareholders, and therefore the said question was outside the realm to answer.

It was reported that Yeung is in the process of securing a HK$7 billion syndicated loan from Citigroup, while Hong Kong tycoon Lee Shau-Kee will lend the mainland property developer the remaining HK$3 billion. Yeung, a self-made billionaire, hit the limelight by selling high-end property on the mainland.

With Yeung's strong mainland background, questions were raised whether TVB's strategic development would shift, if the major stake changed hands. TVB's general manager Stephen Chan said that the station's success lies in its distinct "Hong Kong characteristics" when it comes to programming.

Acquisition rumors had a mixed impact on the share prices of the involved parties yesterday.

TVB surged 2.29 percent to close at HK$51.30, while Shaw Brothers slumped 3 percent to close the trading day at HK$22.25.

Yeung's potential big-ticket purchase did little to prop up shares in Country Garden, with the company's stock price closing down 0.33 percent at HK$6.07.

(HK Edition 05/29/2008 page2)