PCCW update: bids to top USD7.5 billion

22 Jun 2006

The Financial Times reports that US private equity house TPG Newbridge Capital has offered USD7.55 billion for Hong Kong telco PCCW’s core telecoms and media assets, trumping a previous USD7.3 billion bid from Australia’s Macquarie Group. Investment bankers expect more suitors, but the success of any bid could hinge on China Netcom, PCCW’s second biggest shareholder with 20%, after chairman Richard Li who owns a 20.85% stake. Hong Kong’s incumbent fixed line operator must seek Netcom’s consent for any large sale of shares in the telecoms and media divisions, but PCCW says this does not apply to an asset sale. The company has confirmed it has received an expression of interest from Newbridge, which in February lodged a separate offer for 25% of Mr Li’s Pacific Century Regional Developments, which controls PCCW. Shares of PCCW and mobile subsidiary Sunday Communications were suspended this morning for the second day running after briefly soaring amid media reports that the proposed asset sale could result in a large dividend payment. PCCW said the stock had been suspended pending ‘a further announcement in respect of a possible transaction.’

Hong Kong, HKT/PCCW (incl. CSL), PCCW Group