Protecting NSTP'S Brand Name and Goodwill

A Kadir Jasin

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ANOTHER attempt is believed being plotted to flog the New Straits Times Press Malaysia Berhad’s brand name, which may see the venerable company being taken private.

I hope this not true!

But if it is, the premise is clear -- to use the goodwill and the stronger financial position of the NSTP to shore up the private terrestrial broadcaster, Media Prima Berhad.

This is reminiscent of failed attempt a few years back to merge Media Prima Berhad and Utusan Melayu Berhad. It’s not clear if the Utusan is in this corporate play. The chances are it is not.

The current plot, which may be on the agenda of tomorrow’s sitting of Umno’s Political Bureau, is bound to raise another hackle, especially among the minority shareholders of the NSTP.

They do not cherish seeing their company being taken over by the weaker Media Prime and eventually be de-listed from Bursa Malaysia.

Since Media Prime and the NSTP have a common controlling shareholder, only the minority shareholders and the well-wishers can save the NSTP brand name from being shuttle to the backwater in the name of corporate restructuring.

The Media Prima corporate dealmakers and their independent advisers will almost certainly offer sweeteners to buy the support of the minority shareholders.

Money aside, it’s an insult all the same. Those who are familiar with the history of the two companies know that it was the NSTP that “funded” the establishment of Sistem Televisyen Malaysia Berhad – better known as TV3. STMB was later renamed Media Prima when it acquired its competitors, namely TV7, TV8 and TV9.

Since then, despite the economic crises and changes in ownership and managements, the NSTP remains a strong brand with improving financials.

Today it’s nearly debt-free with gearing ratio of less than 0.04 against Media Prima’s 0.7. Its net tangible assets per share stands at RM4.53 against Media Prima’s RM0.42. Earning wise, NSTP recorded EPS of 22 sen against 10 sen by Media Prima.

It’s clear that Media Prima, in attempting to swallow its larger and stronger sibling, is setting its sight on the latter’s superior financials. Even if Media Prima may attempt to sell the idea of creating a mega media company via the takeover and merger, its financials is too inferior to justify a takeover of the NSTP.

Logically, the opposite should be the case. The NSTP should make a reversed takeover of Media Prima not only because it is stronger financially, but also because it has stronger branding and enjoys a higher level of goodwill.

Having been in the media for 40 years and being associated with the NSPT and, by extension TV3, since 1976 and having battled Halim Saad and his raiders in the later part of 1980s, I think I know enough about how the minds of corporate boys work.

(Halim briefly controlled the NSTP and TV3 in late 1980s and early 1990s via his then corporate vehicle, Renong Berhad. Outside the corporate world, however, we remain friends. I am happy that he’s doing well abroad.)

The corporate dealmakers will tell you that they respect history. They will tell you that treasure good brand names and value shareholders’ goodwill. But these are means to achieving the end, which is bottom line and their key performance indicators (KPI).

Whatever is their objective, the NSPT brand name – created by the visionary move of the late Tun Abdul Razak Hussein and executed by Tengku Razaleigh Hamzah – must never be allowed to be destroyed or undermined.

If the NSTP was used to create STMB/TV3, it should not now be used to prop up the entertainment company. If there is a necessity, the NSTP should be the one taking over Media Prima.