PCCW Friday also agreed to make a $1 billion share swap with Hikari Tshushin
Inc. which will leave PCCW with a 1.65 stake in the Japanese conglomerate
and extract a 3.5 percent share to Hikari Tshushin, according to a Bloomberg
report. The deal will also give PCCW a 20 percent stake in Golden Power
International Holdings Inc., which Hikari Tshushin recently purchased, the
Cable & Wireless also today confirmed it had received notice that PCCW
intends to propose a merger with Cable & Wireless HKT. HKT said that since
there “can be no certainty that a firm proposal will be made by PCCW,” it
will continue its negotiations with Singapore Telecommunications Ltd.
(SingTel) as well.
Richard Li’s Net play said that it has enlisted the help of investment banks
Warburg Dillon Read and Bank of China International to back its new bid for
Cable & Wireless HKT, according to reports. The South China Morning
Post also reported that local telecom power Hutchison-Whampoa may become involved in the approach from PCCW.
The Post report added that U.K. mobile player Vodafone Airtouch may
also join the PCCW-Hutchison consortium. Vodafone has recently squared away
its own telecom merger negotiations with Mannesmann A.G., which concluded in
a friendly $159 billion takeover.
Hutchison-Whampoa is owned by Cheung Kong Holdings, Ltd., whose chairman Li
Ka-shing is Richard Li’s father.
Cable & Wireless confirmed that it was approached by PCCW, but did not
release further details. Neither Vodafone nor SingTel has responded
publicly, according to reports. The deal would give PCCW the broadband
network that it had initially set out to build.
The Cable & Wireless group owns 54 percent of Cable & Wireless HKT. The
company last month sealed its deal with Star TV, the original sale of which
paid for the formation of Li’s Pacific Century Group.