Ka-shing in on PCCW bidding war

6 Jul 2006

Hutchison Whampoa head Li Ka-shing is planning to bid for the core telecoms and media assets of Hong Kong’s largest fixed line provider PCCW, controlled by his son Richard Li, according to Hong Kong Daily News. The paper reported that Ka-shing plans to set up a new company to bid for the assets and, if successful, eventually launch an IPO. Observers say that Ka-shing’s bid would likely have the backing of the Chinese government, which remains opposed to foreign ownership of strategic telecoms assets on Chinese territory. The latest development comes after PCCW’s 20% owner China Netcom voiced its opposition to any changes in the ownership of PCCW or its assets; Netcom has three seats on PCCW’s 17-member board. Australia’s Macquarie Group and US-based TPG Newbridge are also bidding for PCCW’s assets. Both have said they are willing to make special concessions to address Netcom’s concerns, including increasing the mainland telco’s stake to 50% to avoid ceding control to foreigners.