Developments No. 2 = HK Front Page News:
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HK Standard Tigernet, Saturday, February 12, 2000
Shares soar as Li eyes move on HKT
By Irene Ip and agencies
CAPTION: Shares rallied yesterday amid market speculation that Richard Li was making a move for Cable & Wireless HKT. Picture: AFP
STORY: TYCOON Richard Li Tzar-kai sparked a major rally in the stock market yesterday as he signalled a move to buy control of Cable & Wireless HKT.
Mr Li's flagship company, Pacific Century CyberWorks (PCCW), said it was assessing a possible investment in Cable & Wireless HKT _ a move that the market interpreted as an attempt to thwart the merger of Hong Kong's biggest phone company with Singapore Telecom.
PCCW has hired Warburg Dillon Read and Bank of China International to advise on the deal.
The two investment banks will assess all the alternatives, including possible investment in Cable & Wireless HKT.
''We have not yet made a bid. It's too early in the discussions,'' PCCW managing director Alex Arena said.
PCCW said it was too early to determine whether any proposal would be formulated for presentation to the Cable & Wireless HKT board.
Many analysts viewed the deal positively and sent share prices of both companies soaring. The Hang Seng Index ended up 535.13 points at 17,380.30, beating the last record close of 17,369.63 on 3 January.
The deal also seemed to highlight the increasingly pivotal role that Mr Li, the son of Hong Kong tycoon Li Ka-shing, is playing in the local market. His activities have sparked strong jumps in the market since last year when he made his corporate forays.
His father recently sparked a rally in the market following the sale of Hutchison Whampoa's stake in Mannsessmann in exchange for new Vodafone shares.
The government has been cool towards the proposal to merge Cable & Wireless HKT with SingTel.
Some key public figures have opposed it, and some analysts said they were disappointed with the deal because it did not really create synergy between the two institutions.
Established less than a year ago by Richard Li, PCCW is building a high-speed Internet network in Asia and is now worth more than Amazon.com.
Buying all or part of Cable & Wireless HKT would let CyberWorks deliver electronic commerce and multi-media services throughout Asia.
A SingTel spokesman would not comment on PCCW's move, saying: ''Our talks with Cable & Wireless HKT are still going on, which have no time frame. We will make an announcement at an appropriate time.''
Cheung Kong chairman Li Ka-shing said yesterday he had no intention of co-operating with Cable & Wireless HKT.
When asked whether he would form a consortium with PCCW, Mr Li said: ''I have never been to the PCCW office.''
His son remained silent yesterday but called an analysts' meeting after trading in PCCW and Cable & Wireless HKT shares was suspended in the afternoon. The analysts said he did not say a word on the deal.
Cable & Wireless HKT said last night it had already received a proposal from PCCW.
''If PCCW is to form a consortium to bid for Cable & Wireless HKT, that will be very positive for Cable & Wireless HKT,'' a telecom analyst said. ''PCCW is a better partner than SingTel since its related companies have a better relationship with the mainland authority, which helps Cable & Wireless HKT to explore the post-World Trade Organisation China market.''
If Cable & Wireless HKT partnered Hutchison Telecom, he said, there would be a true telecom giant to compete with foreign companies in the China market.
Together they could take up to 90 per cent of Hong Kong's fixed-line service market and 70 per cent of the wireless sector.
Secretary of Information Technology and Broadcasting Kwong Ki-chi said the government had set no limit on foreign investment in local telecom operators.
''It does not matter how shareholding structure changes and which country the investment comes from, as long as the telecom companies abide with Hong Kong regulations,'' Mr Kwong said.
The Office of the Telecommunications Authority said it had not received any confirmed acquisition or merger proposal from Cable & Wireless HKT.
''There are a lot of negotiations going on in the market. We cannot review them until they are confirmed and filed to us,'' a spokeswoman said.
''As a regulator, we will be very carefully scrutinising any proposals and make sure market competition and customers' interests will not be affected.''
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online.hkstandard.com
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Just read several articles. A brief one said the offer has already been made..... that is not confirmed, nor any price.
{{ BTW - a few of them pointed-out the close to, @ present levels, 1:1 re: HK Tel & Pac. Century ... }} |
