Pacific Century, HK Tel Merger Talks Halt Trading
Page 1 of 1
Pacific Century CyberWorks Ltd (PCCW) Monday suspended trading of its shares, halting the clamoring for its stock which followed the news of a formal approach to potentially merge with Cable & Wireless plc's Hong Kong unit.
The preliminary move to a merger offer took place last week. PCCW now indicates that the possible offer formula would be a cash and stock deal to HKT shareholders.
At the request of PCCW, trading in its shares were suspended again Monday, pending the issue of an announcement in relation to a top-up placement of shares. The suspension started Friday at 2:30 p.m., but trading was expected to resume again today.
HKT is now in talks with all the interested parties including Singapore Telecommunications Ltd. (SingTel), said a company official.
Combining HKT's network with PCCW's Internet services would create "an undisputed Asian Internet powerhouse, and eventually a truly global leader with roots in Hong Kong," PCCW said in a statement to the Stock Exchange of Hong Kong.
In addition, the statement confirmed that Warburg Dillon Read, the investment banking division of UBS AG, and BOC International Holdings Ltd, the investment banking arm of the Bank of China, had been engaged last Thursday as the financial advisers to PCCW in connection with the proposed transaction.
PCCW has denied in its release to the Stock Exchange of Hong Kong that it is in discussion with Li Ka-shing's Cheung Kong (Holdings) Ltd or Hutchison Whampoa Ltd about the proposed merger. Li is the father of Pacific Century chairman Richard Li.
Hikari Tsushin has also expressed interest in joining PCCW in the bid for Hong Kong's primary fixed network provider, according to the South China Morning Post. Hikari is a partner of PCCW and recently agreed to a US$128 million share swap with the broadband Internet play.
A Reuters report Monday cited sources which claim that SingTel may seek out a third party to support its bid, naming PCCW and Deutsche Telekom as potential partners.