Richard Li and China Netcom agree deal to take PCCW private, report says

4 Nov 2008

Reuters reports that PCCW Group chairman Richard Li and the Hong Kong telco’s largest other shareholder China Netcom have reached an agreement to buy out other shareholders for up to USD2.5 billion and take the company private, according to sources familiar with the matter quoted by the South China Morning Post today. The news comes after PCCW scrapped an attempted sale of its core assets last month, causing its stock to fall to its lowest level since 1999 and its shares to be suspended from trading since 14 October pending a statement. The Chinese paper said that Li’s majority owned investment vehicle Pacific Century Regional Developments and Netcom (which is in the process of merging with sister telco China Unicom) had agreed to buy the outstanding 57.62% of PCCW Group for a total of up to HKD19.5 billion (USD2.5 billion), or less than HKD5 a share, with proceeds from the sale earmarked for overseas operations to offset slowing domestic business. The offer price would represent a premium of as much as 81.82% over the 13 October closing price of HKD2.75. Both companies refused to comment on the report.

Hong Kong, China Netcom, China Unicom, PCCW Group