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Similarly, the publication also promised that it will not reduce the benefits
as agreed under the existing NUJ-UM collective agreement.
<p>The assurance to maintain the status quo for NUJ members was given by the Utusan
group executive chairman Hashim Makaruddin during a briefing on Monday.</p>
<p>The briefing was attended by NUJ president Norila Mohd Daud and NUJ-Utusan
branch committee members. Utusan is the publisher of Utusan Malaysia and Kosmo.</p>
<p>“The NUJ is holding the Utusan management to its promise that its proposed
merger with NSTP would not result in retrenchment or the reduction of benefits
in the existing collective agreement,” said NUJ general secretary Hong
Boon How in a statement today.</p>
<p>He added that the union also welcomed Hashim’s assurance at the briefing
that Utusan will continue to retain its editorial independence under the merger.</p>
<p>“We also urged the Utusan management to fully study the viability of the
merger as not to affect the profitability of the group and the welfare of the
workers in the long term,” he added.</p>
<p>The proposed merger between the two media giants is still under negotiation
and a decision is expected early next year.</p>
<p><b>Being reviewed by Umno</b></p>
<p>The Edge daily today quoted Mayban Securities Research as saying that Utusan
and NSTP would become subsidiaries under a new holding company under the proposed
merger plan.</p>
<p>The research house said that the proposals were presently under review by the
Umno Supreme Council.</p>
<p>A decision on the merger was expected to be announced last Monday but it hit
a snag after reservations made by several Umno leaders who were worried that
Utusan might suffer as a result of the merger.</p>
<p>They feared that the merger would affect the identity of the Malay daily and
backfire on the party, despite Umno continuing to control it.</p>
<p>The Edge reported that under the new proposals, all present newspapers will
be maintained and the management team of the new listed entity will comprise
the senior management of both NSTP and Utusan.</p>
<p>“Should the merger get the go-ahead, the merger process is expected to
be completed in six to nine months’ time, that is sometime in second half of
2007,” it quoted the research house.</p>
<p>At present, Umno controls about 50 percent equity interest in Utusan Melayu,
which the party took over after an acrimonious battle with the then newspaper’s
editors and journalists in 1961.</p>
<p>However, the party’s control over NSTP has always been through nominee business
groups such as Media Prima, which has a 43 percent stake in NSTP.</p>
<p>NSTP publishes the English dailies New Straits Times and Malay Mail as well
as Malay newspapers Berita Harian and Harian Metro.</p>
<p>The merger could also pave the way for the ruling party to directly control
all the private free-to-air TV stations – TV3, ntv7, 8TV and Channel 9 – which
are currently under Media Prima.</p>
<p><b>Media Prima’s initiative</b></p>
<p>Mayban Securities Research was also quoted as saying that Media Prima and NSTP
held a conference call for analysts on Dec 5 to clarify the current status of
the merger, including the assurance editorial independence of all the newspapers
will be maintained.</p>
<p>It was also revealed that Media Prima’s senior management approached Umno,
as the controlling shareholder of the Utusan group, to explore the possibility
of a merger between the two largest Malay language newspaper groups.</p>
<p>“We understand that the proposed merger would enable Media Prima to reduce
its shareholding in NSTP from 43.3 percent to less than 20 percent, as NSTP
shareholders will receive a combination of cash and shares in the new holding
company,” it said.</p>
<p>With the uncertainties over the merger talks, the shares of the companies took
a beating yesterday as trading resumed.</p>
<p>When the market closed at 5pm, both companies saw their share prices dropping
by around 14 percent.</p>
<p>Shares of NSTP closed at RM2.53, a drop of 13.6 percent – or 40 sen – from
the Friday price of RM2.94 when the shares were suspended pending the expected
merger.</p>
<p>Meanwhile, Utusan shares was hit a little harder – closing at RM1.56, a drop
of 14.75 percent – or 27 sen – from the last traded price of RM1.83.</p>
<p>The trend continued today with NSTP dropping a further RM0.01 and Utusan down
by five sen.
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