S&P affirms TOM

Standard & Poor's said it affirmed its BB+ long-term corporate credit rating on TOM Group Ltd.

The outlook is stable.

At the same time, S&P said it also affirmed its BB+ issue rating on outstanding convertible bonds due 2008 that were issued by its subsidiary, TOM Holdings Ltd. and guaranteed by TOM.

TOM has announced plans to buy out and delist its TOM Online Inc. at a cash price of HK$1.52 per share, the agency said, noting that that would be a 33.3% premium over the closing price of HK$1.14 per share on March 2.

The rating affirmations follow a review of TOM's announced plan, the agency said, adding that TOM is still effectively controlled by the Hong Kong group chaired by Li Ka-Shing that includes Cheung Kong (Holdings) Ltd. (A-/negative) and Hutchison Whampoa Ltd. (A-/negative).

The implicit parental support provided by Li's group is a major factor underpinning the rating on TOM, the agency added.

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