(AFP) Two tycoons have revived plans to form a new media group by taking over two English-language newspapers in a deal worth RM54 million, analysts said today.

Nexnews Bhd, jointly controlled by Tong Kooi Ong and Vincent Tan Chee Yioun, announced yesterday it had signed memorandums of understanding to acquire The Sun Media Corp and The Edge Communications.

Nexnews, a listed jewellery maker which plans to move into the multimedia industry, is proposing to buy 100 percent of The Sun for RM40 million and 70 percent of The Edge for RM14 million.

Tan heads the diversified Berjaya Group and controls popular English-language tabloid The Sun while Tong, who formerly owned banking group PhileoAllied Bhd, is a key shareholder of weekly business paper The Edge.

Second attempt

The proposal is second attempt by Nexnews to put The Sun and The Edge under one roof as part of its multimedia plans.

It had in July 2000 proposed to buy both companies but the deal was aborted in March last year due to difficulties in securing regulatory approvals.

The main difference in the new scheme is the presence of Tan.

Nexnews announced on Monday, ahead of the signing ceremony, that Tan had bought a 26.15-percent stake in Nexnews from Tong and both men now equally share a 52-percent controlling stake in the company.

Tan will be appointed to Nexnews board of directors and invited to be chairman while Tong will be deputy chairman and remain as chief executive.

The Business Times said Tong appeared bent on pushing the deal through, having sold half his stake in Nexnews to Tan at a hefty loss of RM18 million.

Tong was quoted as saying the deal would allow Nexnews to proceed with its earlier plan to venture into the media business.

"As our current business is loss-making, we see this as an opportunity to shape the company's future. There is interesting potential for Nexnews as the media industry in this country has room for further growth," he said.

Massive sackings

The Sun newspaper, which hit the streets in early 1994, is the third largest English-language daily in peninsular Malaysia with a circulation of nearly 90,000 copies.

But it was believed to be unprofitable and recently laid off 43 journalists and editorial employees as well as a library staffer. It is also involved in a dispute with remaining staff over annual bonus payments.

Analysts said the deal could help turn around The Sun and give top dailies The Star and the New Straits Times more competition especially if specialised journalists from The Edge were seconded to The Sun.

"The last time that happened, The Sun showed improvement in circulation and readership numbers in just over a few months but this all reversed when the deal was aborted," said an analyst with a local brokerage.

"We believe this is negative for other English dailies but it may take some time before the impact can be seen."

Other analysts said the deal also augured well for Nexnews once it converts into the more lucrative multimedia industry.

Trading in Nexnews shares was suspended Monday. They last traded at RM2.30.