Telecoms firms rally as SingTel says it will work with HKT
scmp.com
STEPHEN SEAWRIGHT, BARRY PORTER in Singapore,
and AGENCIES
Telecommunications shares rallied strongly yesterday as
signs of thawing relations between parties in the Cable
& Wireless HKT takeover battle helped fuel optimism
towards the sector.
Defeated bidder Singapore Telecommunications
(SingTel) said it was still interested in working closely
with HKT, despite losing to bidding rival Pacific
Century CyberWorks.
At the same time, News Corp executive vice-president
James Murdoch said in Beijing the Australian-based
company was still "very committed" to a joint venture
between its Star TV unit and HKT.
News Corp had backed SingTel in the struggle to take
over HKT, which CyberWorks won on Tuesday with a
bid of up to HK$296.41 billion.
Meanwhile, the investment banks mandated by
CyberWorks to raise financing for the bid said last night
they would arrange and underwrite a US$12 billion loan
which would meet the cash portion of the offer and
provide working capital.
The loan, to be arranged by BOCI Capital, HSBC
Investment Bank, Banque Nationale de Paris (Hong
Kong) and Barclays Capital Asia, has a maturity of 364
days with the option to extend part of it for another two
years.
HKT shares rose 6.51 per cent in a late rally following
reports of Mr Murdoch's remarks.
CyberWorks shares rose 5.79 per cent to $21.90,
which also boosted HKT's stock as their merger will be
financed by exchanging equity.
China Telecom (HK) gained 4.1 per cent to a record
close of $76.
The company now has a market capitalisation of more
than $1 trillion - more than 40 per cent greater than
previous market leader HSBC Holdings.
SmarTone Telecommunications soared 10.09 per cent
to $34.90, while Hutchison Whampoa gained 3.29 per
cent to $125.50.
The four telecoms-related stocks pushed the Hang Seng
Index up by the equivalent of 344.51 points.
That accounted for nearly all of yesterday's gains, which
ended with the index up 348.43 points at 17,285.24.
SingTel chief operating officer Lim Toon said yesterday:
"We still believe that between SingTel and C&W HKT
there is a lot of synergy and it makes business sense for
the two of us to work together."
He said SingTel would pursue future opportunities more
aggressively after losing the battle for HKT.
"We actually learnt a lot from the experience and I am
sure we will work a lot harder," said Mr Lim.
"There are still a lot of investment opportunities, in Asia
especially."
SingTel and HKT already have a number of
long-standing co-operative agreements.
"These business arrangements, I'm sure would
continue," Mr Lim said.
SingTel president Lee Hsien Yang declined to comment
on the failed merger for legal reasons.
"There is a limit to what we can say right now," Mr Lee
said. "We have withdrawn right now, but we are
discussing."
He said the firm would issue a statement today, without
elaborating.
The company said it had yet to decide whether to file a
law suit against HSBC, which it has accused of a
conflict of interest in its role during the takeover.
SingTel's softer stance follows conciliatory remarks on
Tuesday by CyberWorks chairman Richard Li Tzar-kai,
who said that future co-operation with SingTel was
possible.
Mr Li also said he was open-minded about the
Star-HKT joint venture.
The venture involves an interactive pay-TV and Internet
service that had been expected to compete with
CyberWorks' planned pan-Asian broadband network.
Mr Li is due to meet News Corp chairman Rupert
Murdoch in Hong Kong next week.
James Murdoch said yesterday: "I already met with
Richard and had a very positive talk, and we both
agreed we're very committed to it [the joint venture]."
He said the venture was "not something you could walk
away from".
"It's a meat and potatoes agreement," he said.
"It's a real company with real assets.
"We're putting one of our best executives in it."
News Corp veteran Tom Mockridge was named chief
executive of the venture on Thursday. |
