Independent shareholders urged to block SmarTone bid

19 Dec 2002

The minority investors in Hong Kong’s third-largest mobile operator SmarTone [0315.HK] have been warned against accepting a takeover bid by majority shareholder, property developer Sun Hung Kai. Financial advisor ING has warned the independent shareholders, the largest of which is BT [BT.L] with a 21% stake, that the proposed deal values each share at HKD8.25, nearly 5% lower than the average share price in the six months prior to the offer. Sun Hung Kai, whose 29.36% stake in SmarTone is held via its Cellular 8 subsidiary, has announced it has no intention of privatising the cellco and is therefore making the general offer at less than share price. Despite ING’s warning, BT is considering the bid as an easy way of disposing of illiquid stock, but any deal would result in a heavy loss for the UK company, which bought its stake for HKD25 per share three years ago.

Hong Kong