The signs are not good for the latest attempt to take Hong Kong telecoms group PCCW private, after a share offer was launched in December by its chairman Richard Li and major stakeholder China Netcom. Financial analysts worldwide are pessimistic about the chances of success of the offer, despite it being raised to HKD4.50 (USD0.58) per share from HKD4.20 per share at the end of the month. According to one such report, in the Canadian Financial Post, the deal valued PCCW’s stock at a 45% premium to the company’s share price immediately before the bid was announced, but many retail investors bought shares at much higher levels and are angry that Li’s group appears to be taking advantage of the current market downturn to try to buy them out cheaply. The report goes on to say that minority shareholders are also unhappy the proposed deal would see Li and state-run Netcom share a special USD2.8 billion cash dividend upon closure. The new offer must be approved by 70% of shareholders at a vote likely to take place by the end of this month. Hong Kong’s telecoms regulator OFTA approved the proposed ownership change on 23 December, after studying the terms of the arrangement set out in an announcement from PCCW on 4 November, which stated that after the transaction, companies connected with its chairman would hold 66.67% of PCCW, and China Netcom would hold the remaining 33.33%. As at 4 November, PCRD (controlled by Mr Li) and Netcom held 22.54% and 19.84% respectively of the issued share capital of PCCW. Other companies controlled by Li together held a further 5.2%. The remaining 52.42% of PCCW’s share capital was held by the public.