September 24, 2021

Alibaba seeks to exit Mango Excellent Media after Beijing’s scrutiny

By ellen

SHANGHAI (BLOOMBERG) – Alibaba Group Holding is seeking to sell its entire stake in a local television network after the Chinese government’s scrutiny over media and the technology industry intensified.

An Alibaba investment arm plans to sell its 5.01 per cent stake in Mango Excellent Media, a TV shopping and entertainment network based in the central province of Hunan, Mango said in a filing late on Thursday (Sept 23). The e-commerce giant, which made the purchase only nine months ago, is seeking a waiver from a one-year lock-up agreement, the filing showed.

An Alibaba representative couldn’t be immediately reached for comment.

Beijing wants billionaire Jack Ma’s firm to sell some of its media assets, including the South China Morning Post, because of growing concerns about its influence over public opinion in China, Bloomberg reported earlier this year. The tech giant had been a key target in a sprawling crackdown that has expanded from e-commerce and fintech to data security, after-school education, gaming and now celebrity fan culture.

“This may be the beginning,” says Feng Chucheng, a political analyst with consultancy Plenum. “Beijing is very concerned of big capital’s control of media, as they would be also to leverage their control for ‘illegitimate’ interest or manipulation of public opinions.”

While the filing didn’t reveal the proposed selling price or the prospective buyers, shares of Mango have tumbled roughly 40 per cent since Alibaba’s offer to invest in the media company was disclosed last year. The larger firm had paid 6.2 billion yuan (S$1.3 billion) for the 5 per cent stake, which was valued at about US$600 million (S$809 million) based on Mango’s market valuation as of the Thursday close.

The Hangzhou-based giant’s stock has more than halved since reaching a record high last October, after affiliate Ant Group’s initial public offering was scrapped and antitrust authorities launched a probe into the e-commerce firm that culminated in a record US$2.8 billion fine.

Mr Ma and Alibaba quietly built up a sprawling portfolio of media assets over the years, spanning BuzzFeed-style online outlets, newspapers, television-production companies, social-media and advertising assets. Alibaba has a major stake in the Twitter-like Weibo and Youku, one of China’s biggest streaming services, as well as other online and print news outlets, including the SCMP, the leading English-language newspaper in Hong Kong.

“Under the hood of Alibaba, there are multiple high-profile media companies, as well as many investment to media companies,” Plenum’s Mr Feng said. “Alibaba could potentially divest from all of them.”