13.9.2002HONG KONG (AFX-ASIA) - tom.com Ltd (8001.HK) was lower in line with the market, though news that the company is in talks to acquire a computer weekly magazine in China is generally regarded as positive, dealers said.
The company today confirmed earlier media reports that it is in talks to acquire a computer magazine in China, but added that no agreement has been reached yet.
It said the publication has a readership of around 3.3 mln in China, with advertising income of 125 mln yuan in 2001.
Dealers said that while the move is potentially positive for the company, the stock is undermined by the weaker performance of the broader market.
Some dealers said the fact that tom.com is usually cautious in acquisition deals and that the deal may or may not come through may have prompted some investors to adopt a wait-and-see attitude until there are more concrete developments.
At 11.54 am, tom.com was down 0.025 or 1.087 pct at 2.275 on trade of 894,000 shares, while the Hang Seng Index was down 196.38 points or 1.98 pct at 9,699.95.
Analysts said that the acquisition would further enhance tom.com's position in the computer publishing media in the Greater China, as it already owns PC Home, a magazine of similar criteria in Taiwan.
"Fundamentally, the deal would be positive. However, the stock is not reacting now as some may want to wait until the deal actually materialises or when more concrete details are available, such as pricing," an analyst at a foreign brokerage said.
The analyst said past experience suggest that tom.com is usually cautious when carrying mergers and acquisitions, and the discussions do not always turn out to be fruitful, citing the company's aborted plans to acquire a stake in Asia Television as an example.
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