RUN Run Shaw, the 101-year-old film mogul who helped fund ''Blade Runner,'' may offer to buy out Shaw Brothers (Hong Kong) Ltd after failing to sell his stake in the studio.
An announcement will be made on ''a possible privatization of the company by the controlling shareholder,'' Shaw Brothers said in a statement yesterday. The stock was suspended.
The plan by Sir Run Run, who started making movies in 1920s Shanghai and won a Cannes award for ''The Magnificent Concubine,'' follows the stock's 65-percent drop from a record in June after he ended talks to sell his holding amid the global recession. Shaw Brothers is the biggest investor in Television Broadcasts Ltd, Hong Kong's dominant TV station operator.
''Hong Kong media companies will face a difficult operating environment as the recession hits,'' said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. ''Assuming the privatization offer provides a decent premium, some Shaw Brothers investors may be inclined to cash out.''
Shaw Brothers, which rose 0.5 percent to HK$8.13 (US$1.05) in Hong Kong trading on Friday, has fallen from the HK$23.50 peak on June 26.
The stock was boosted in June by reports the chairman planned to sell his stake to Country Gardens Holdings Co Chairman Yeung Kwok Keung, Bloomberg News reported.
Sir Run Run, who is also chairman of TVB, controls 75 percent of Shaw Brothers. The film company has a market capitalization of HK$3.24 billion, based on the share price on Friday.
In October, Shaw Brothers said talks by Sir Run Run to sell his stake in the firm ended due to the global recession.
TVB shares rose 1.5 percent to HK$24.05 in Hong Kong trading as of 3:05pm, compared with a 2.9-percent gain by the city's benchmark Hang Seng Index. Shaw Brothers owns a 26-percent stake in the TV company.
Sir Run Run, whose movie career spans about 80 years, has made more than 1,000 films, starting in 1920s Shanghai, near his birthplace Ningbo. By the 1960s, Shaw Brothers (Hong Kong) Ltd was said to be Asia's biggest producer of movies.