Bangkok, 26 October 2020 – SEC is advising the shareholders of Nation Broadcasting Corporation Public Company Limited (NBC) to study information and exercise their voting right at the annual general shareholders’ meeting (AGM) to be held on 29 October 2020 with regard to the company’s plan to acquire the “Komchadluek” trademark from National Multimedia Group Public Company Limited (NMG) and the assets and business under the “Komchadluek” trademark from Komchadluek Media Co., Ltd. at the total amount of 70 million baht. The independent financial advisor views the objectives of the acquisition plan are reasonable but the price and certain conditions are deemed inappropriate, and therefore is of the opinion that NBC’s shareholders should not approve the acquisitions.
NBC
will hold the AGM 2020 to seek approval for the acquisition of “Komchadluek” trademark from NMG at the amount of 69.9 million baht and the acquisition of assets and business
under the “Komchadluek” trademark
from Komchadluek Media at the amount of 100,000 baht, resulting in the total
acquisition value of 70 million baht. NBC’s Board of Directors and the Audit
Committee view that the entry into the acquisition of business and the
trademark of Komchadluek is appropriate and beneficial for NBC and its
shareholders. For example, the acquisitions can increase NBC’s market share in
the digital media production business, create new business opportunities,
expand the existing business, and help to manage costs and
expenses of the production department more efficiently, etc.
However,
the independent financial advisor views that despite the reasonable objectives
of the proposed acquisitions, NBC’s shareholders should not grant an approval
because (1) the sale price of “Komchadluek” assets and trademark at the amount of 70 million baht is
higher than the fair value of the business as calculated according to the discounted
cash flow method (DCF) by the independent financial advisor at the range of 37.36 - 40.92 million baht, (2) the business to
be acquired has not made any profits, (3) there is
uncertainty in the operating results of the event organization business, and (4)
NBC may be exposed to the risk of nonperformance to the sale and purchase
agreement as NMG is required to repay a partial amount of the account
receivable to NBC within seven business days as from the date when NMG has
received the payment for the trademark from NBC.
The
aforesaid transactions are deemed acquisition of assets and related
transactions, which have to be approved at the shareholders’ meeting by at
least three fourths of the attending shareholders with the voting right,
excluding the votes of the shareholders with a conflict of interest.
SEC
therefore advises NBC’s shareholders to study the details of the matter
carefully and exercise the voting right to protect own interest. They should
also request NBC’s executives to clarify and answer questions in order to
gather comprehensive information before voting at the shareholders’ meeting. In
addition, due to the current COVID-19 pandemic crisis, the shareholders may
consider proxy voting by an independent director in lieu of attending the
meeting in person and submit questions to the company prior to the meeting
date.
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