A Shanghai Media Group stall at an exhibition. Photo: CFP

By Miranda Shek

Chinese media reported a rumor Monday that Shanghai Media Group (SMG) is in talks with Hong Kong media tycoon Richard Li to cooperate in buy-ing a controlling stake in Hong Kong broadcaster TVB.

SMG refused to comment on the rumor, while Winne Ho, a spokesman for TVB, told the Global Times that she did not have any information regarding the situation.

TVB's stock surged 4.3 percent to a three-month high on Hong Kong's benchmark Hang Seng Index Monday.

According to Hong Kong media acquisition regulations, media shares can only be bought by Hong Kong-registered enterprises. This means that SMG would need to find a Hong Kong partner if it were to purchase TVB shares.

Industry insiders said SMG would be interested in the Hong Kong broadcaster due to the success of the latter's co-productions on the Chinese mainland.

Earlier this year, SMG and TVB cooperated for the first time to produce a TV series, which attracted good ratings in both cities.

Funds from TVB's mainland projects have risen 185 percent over the past decade.

Speculation over a TVB controlling purchase has been rife since the broadcaster's biggest shareholder, 102-year-old Run Run Shaw, announced in 2008 that he plans to sell his 32.49 percent share of the company, valued at around 5.66 billion yuan ($852.86 million).

Henderson Land Development Chairman Lee Shau-kee's son, Peter Lee, was reported as to be in talks about buying stakes in the station in September.

Richard Li's father, Li Ka-shing, is Hong Kong's richest man with a fortune of around $24 billion, according to Forbes magazine.

Run Run Shaw officially resigned from his post as the chairman of TVB on January 1.

Founded in 1967, TVB was the first free-to-air television broadcaster in Hong Kong, where it dominates the local TV broadcasting market.

TVB has broadcast to nine cities in Guangdong Province since 2004.