The New Straits Times Press (Malaysia) Bhd (NSTP) and Utusan Melayu (Malaysia) Bhd may be on the verge of a merger to create the country’s largest media group.

Sources said the proposals, which were first initiated about six months ago, had been set into motion and it was learnt that Utusan’s board will meet today to discuss the matter.

Under the proposed merger, NSTP and Utusan will be de-listed and their current shareholders will be offered new shares in a new entity, based on the companies’ book value.

It is learnt that due to the higher value of NSTP’s net tangible assets (NTA), its shareholders may also benefit from a cash payout from the new company.

This will pave the way for Media Prima Bhd, which holds 32.94% of NSTP, and Umno, which owns 50.46% of Utusan, to jointly control the new entity.

When contacted, Media Prima chief executive officer Abdul Rahman Ahmad declined to deny or confirm the speculation.

“We can’t comment at this juncture; we are always looking for ways to create shareholder value in NSTP.

“There has been a lot of speculation. At this point, it is just rumour,” he told FinancialDaily on Nov 27.

NSTP’s NTA per share at Sept 30, 2006 was RM4.12 and Utusan Melayu’s amounted to RM2.06 at end-July 2006. NSTP and Utusan have a paid-up capital of RM217.23 million and RM109.22 million respectively.

Yesterday, NSTP’s share price rallied 24 sen or 10.67% to close at RM2.49, its highest in nine months. A total of 2.59 million shares were transacted at prices ranging from RM2.28 to RM2.49.

Utusan added 16 sen or 14.68% to RM1.25, the highest since May, with 2.87 million shares done at between RM1.12 and RM1.26.

Citing executives close to the proposed merger, a foreign newspaper report on Nov 27 said the proposal had obtained the green light from Prime Minister Datuk Seri Abdullah Ahmad Badawi.

The report said editorially, the two entities would remain independent of each other and would maximise resources in non-editorial matters such as marketing, advertising and utilisation of printing plants, particularly NSTP’s Shah Alam plant.

A local research house said such a merger would mark the largest print media consolidation ever under the Malay print industry in Malaysia.

“Total industry advertising expenditure (adex) is in a slowdown now, which calls for consolidation to reap the benefits of economies of scale.

“We note that both companies are now making losses, which we believe, however, is not the main concern for this potential move. The deal could pull NSTP under direct UMNO control,” it said.

Other analysts said among the factors to determine the merger would be the advertising revenue.

“We have to look at the cashflow, which is the advertising revenue, and not only at NTA since they are not manufacturing plants,” said an analyst.

NSTP posted a net profit of RM6.4 million in the third quarter ended Sept 30, 2006. It has RM14.29 million cash.

Analysts said NSTP continued to face an uphill battle to arrest the decline in its English adex newspaper share, with a circulation of about 150,000 copies per day.

Consensus net loss was RM4.6 million for financial year (FY) ending Dec 31, 2006. However, NSTP was forecast to turn around in FY07 with a RM17.3 million net profit, following cost-cutting measures.

Utusan reported a net profit of RM2.37 million for the second quarter ended June 2006. It has RM42.15 million cash.

The Edge Daily, Malaysia, 27-11-2006

THE tourism industry has become a massive revenue earner for many countries. For some, it is the number one source of government revenue.  In a world that’s “shrinking” with easier and faster modes of travelling, many people are willing to spend to see other parts of the world.

The direct and indirect benefits derived from focusing on this trade are immense, to say the least. The spin-offs are a major source of national and transnational investment, which help to a great extent in providing employment at all levels and keep several large and small industries ticking.

No one can deny that Visit Malaysia Year 2007 could not have been better timed, with it coinciding with the 50th National Day celebrations next year.

The Tourism Ministry has already started its push through our missions abroad and Tourism Malaysia offices in several parts of the world. We have spent millions of ringgit to announce to the world that we are ready for the influx. The target: about 20 million arrivals.

But the big question is: “Are all Malaysians ready to help make the visitors’ stay a pleasant experience so that they will carry happy tales to tell their relatives and friends back home?”

If you may recall, the first question you ask your friend or relative when they return from a trip abroad is “How’s the country? Did you enjoy your stay?”

Just like when we are overseas for a holiday, those who come here, especially budget travellers, want fairly clean hotels that are not over-priced. We do not want complaints of bug-infested bed and breakfast lodges with filthy toilets in the cities to be a subject of discussions over the Internet.

With five weeks left before 2007, the licensing and enforcement authorities have a task on their hands to flush out these dirty toilets.

And beware of zealots who, in the name of religion and morality, could chase potential tourists away.

Let us also make it easy and safe for tourists to travel here. The touts at the airports and unscrupulous cabbies must be taken off the road or we will pay dearly for this.

Some time ago, The Star reporters on an undercover assignment proved that some of them charge as high as RM400 for a trip to Kuala Lumpur from KLIA. Although action is being taken, such activities are still going on. It has to be instilled on everyone that VMY 2007 is not about making a fast buck. It’s about getting tourists to come back to Malaysia a second time, or even more.

The last thing anyone wants to experience during a holiday is being mugged or becoming a snatch theft victim.

In this regard, perhaps the police should have a special VMY 2007 team to ensure security is adequate in popular tourist destinations.

VMY 2007 is going to be a 12-month affair, so let us show the nicer side of ourselves. Our show of hospitality at all levels will determine where we stand in the eyes of the world. This will be the finer touch to the tangible achievements that we so proudly shout about.

Are you ready?

The Star, Sunday November 26, 2006