PCCW negotiations ‘to conclude by end of July’

3 Jul 2006

Hong Kong telco PCCW’s CEO Richard Li hopes that negotiations to sell the group’s fixed line, wireless, broadband and media assets will reach a conclusion by the end of July, according to local media reports. His comments came after PCCW’s board met this morning to discuss the pending sale. Li added that no decision has been reached, and that PCCW and potential bidders – including Australia’s Macquarie Group and US-based TPG Newbridge Capital – ‘will continue the talks in the next few days.’

Hong Kong’s Wen Wei Po daily last week reported that Chinese state-controlled investment firm Citic Group was planning to make a joint offer for PCCW’s telecom assets with mainland fixed line giant China Netcom, owner of a 20% stake in PCCW. The Wen Wei Po report quoted a spokesperson for Citic’s Hong Kong investment subsidiary GGI as saying the company was entering the fray out of ‘social responsibility’ to prevent foreigners from taking control of the Special Administrative Region’s wireline phone network. However, China Netcom, whilst voicing opposition to the sale of telecoms assets to non-Hong Kong or Chinese investors, has denied the report, saying it has no plans to collaborate with GGI, China Business News reported. According to China Netcom spokesman Li Tao, reports of such a collaboration are ‘inaccurate, China Netcom has no contact with GGI over the issue, nor has it held any negotiations with other firms on a bid for PCCW assets.’ Li Tao reiterated China Netcom’s position that it is ‘not willing to see any significant change to the Hong Kong ownership of PCCW or its assets.’

Australian tycoon Rupert Murdoch’s News Corp has confirmed that it has held talks to join Macquarie’s bid for PCCW’s assets, but contrary to a published report from a News Corp-owned newspaper, it has not yet joined the consortium, after being approached by Macquarie, according to a company spokesperson, who said: ‘We’ve had preliminary talks with Macquarie, but we have not taken any stake [in a consortium].’ Mr Murdoch has publicly said he doubts the bid will succeed, but added that News Corp would be interested in PCCW’s broadband television assets if the other bids fail. Murdoch is pessimistic about the Australian bank’s chances as the fate of the bids depends greatly on the attitude of the Chinese Government.