PCCLF Briefing Cancelled; SingTel partners w/ News Corp:
20:37 28-FEB-2000
FOCUS-SingTel HKT bid up with News Corp
SINGAPORE, Feb 28 (Reuters) - Singapore Telecommunications Ltd has strengthened its hand in its efforts to merge with Cable & Wireless HKT <0008.HK> by securing support from media tsar Rupert Murdoch's News Corp , analysts said on Monday.
"It's not so much the money alone. The fact that SingTel is getting the backup from News Corp has improved its chances in its HKT bid," said Tjandra Kartika, analyst at Goh, Vickers Ltd. In an announcement just hours before the board of Britain's Cable & Wireless Plc was due to decide on whether to sell its 54 percent stake in HKT to SingTel or Hong Kong's Pacific Century CyberWorks <1186.HK> (PCCW), SingTel said News Corp would invest US$1 billion for about a four percent stake in SingTel.
"News Corp's investment is intended in part to help facilitate SingTel's pending bid for Cable & Wireless HKT," SingTel said in a statement.
Under the partnership, News Corp and SingTel would jointly develop broadband Internet and wireless businesses in Asia and create equity joint ventures in related fields.
Kartika said News Corp, which has businesses spanning from movie production to digital and satellite broadcasting, provided a strong name and helped make SingTel bid more appealing.
Kartika said the fact PCCW, controlled by Richard Li, had cancelled at the last minute a news briefing scheduled for 0900 GMT on Monday indicated that SingTel's chances had improved.
Fredson Bowers, telecom analyst with Indosuez W.I. Carr Securities in Hong Kong, said SingTel's link-up with News Corp was positive even in the event that its bid for HKT failed.
"This very substantially addresses market concerns that SingTel does not have a strategy in place in the event that the HKT bid falls through," Bowers said. "It would be very easy for (News Corp's) Star TV to replace HKT with SingTel in their joint venture," he added. Star TV is News Corp's Asian satellite group. The alliance was seen elevating SingTel into Asia's first telco company with expertise in communications, content and technology.
Analysts said they saw limited downside potential for SingTel shares, which had been relatively unaffected by its HKT bid compared to PCCW shares which had surged on the prospect of its merger with HKT. "The downside is limited.
Any positive outcome from the deal could boost SingTel shares," said Kartika, who put his price target for SingTel shares at S$3.50 each. SingTel shares closed unchanged at S$2.68 after a volatile day on Monday, fluctuating between 2.80 and S$2.67.
((Singapore Newsroom (65) 870-3843; Fax (65) 776-8112, singapore.newsroom@reuters.com)) .
ww5.e-finet.com |
