Alibaba to pay US$266 million for Hong Kong's SCMP newspaper

Chinese internet giant Alibaba will pay US$266 million for Hong Kong's South China Morning Post, the newspaper said Monday, far higher than analysts' estimates in a deal that has sparked fears the paper will lose its independent voice.

The business had been valued at half that amount, and some observers said the hefty price tag reflects Alibaba's desire to control media in the semi-autonomous territory.

The deal comes as concern over press freedom grows after attacks on journalists, reports of pressure on editorial staff from authorities and increasing self-censorship.

Alibaba "has agreed to purchase the media business of the (SCMP) Group for a cash consideration of HK$2,060,600,000", the newspaper said in a statement to the Hong Kong Stock Exchange.

The group also owns the Hong Kong editions of magazines Esquire, Elle, Cosmopolitan and Harper's Bazaar.

The Chinese firm announced the purchase on Friday, saying it would use its "digital expertise" to provide "comprehensive and insightful news and analysis of the big stories in Hong Kong and China".

In a letter to the newspaper's readers following the announcement of the sale, Alibaba executive vice chairman Joe Tsai vowed the SCMP would be "objective, accurate and fair".

However, in an interview published on the paper's website, Tsai accused western media of bias against China, saying that Alibaba would "see things differently".

Francis Lun, chief executive of Hong Kong brokerage GEO Securities, said the inflated price handed to the paper's Malaysian owner, tycoon Robert Kuok who bought a controlling stake in 1993, reflected a political motivation.

"Mr Kuok really hit the jackpot because certainly they overpaid for it... the outlook is grim for a newspaper," Lun told AFP.

"If your purpose is trying to control the local media, it has its value. The actual economic benefit is doubtful," he said, echoing views that Ma's close ties with Beijing will inevitably affect coverage and promote a China-centric view.

Analyst Jackson Wong agreed the sale was "very expensive" but said Ma had splashed out in order to capitalise on the SCMP brand and online presence as Alibaba extends its reach in the region where it is on a buying spree.

"It would be extremely difficult for a new media company to establish the name," said Wong from Simsen Financial Group.

"Alibaba has not only made investments in e-commerce they have been buying different kinds of companies," he said, adding that the SCMP could help Ma "broaden his business reach in various aspects in Asia Pacific".