CyberWorks Falls as Buyer Eludes Cable & Wireless (Update1)
By Cathy Chan
Hong Kong, Feb. 20 (Bloomberg) -- Pacific Century CyberWorks Ltd., Richard Li's Internet and telecommunications venture, fell 4.8 percent after Cable & Wireless Plc. said it hasn't found a buyer for a 7.45 percent stake in the company.
CyberWorks shares fell as low as HK$4.40 after C&W, Europe's third-largest network for Internet service providers, said last night it's still talking to investors about an ``orderly'' sale of CyberWorks shares following the end of a lock-up period.
``The simple fact is that they've not found the investor,'' said Kelvin Cheng, associate director at Daiwa Institute of Research Hong Kong Ltd. ``Sentiment must be bad since people will be reluctant to buy on expectation of huge future supply.''
C&W sold control of Cable & Wireless HKT Ltd., Hong Kong's dominant phone company, to CyberWorks in August, retaining a 20.2 percent stake in the combined company. The U.K.-based company has since pared its holdings in CyberWorks to 14.9 percent as part of its plan to focus on providing data services to businesses.
As a condition of the HKT sale, C&W locked up its CyberWorks stake. The company sold 4.9 percent of CyberWorks for $1.3 billion in September, and was allowed to sell 7.45 percent on Feb. 17. It may sell the balance in August, or earlier if CyberWorks approves.
The 1.6 billion CyberWorks shares that C&W may sell now are valued at HK$7.2 billion ($923 million) at today's closing price. Any disposal may further erode CyberWorks' share price.
C&W pocketed about $6 billion in cash from the sale of HKT, in addition to the one-fifth stake in CyberWorks. CyberWorks paid Cable & Wireless HKT shareholders $11.32 billion in cash and issued 8.67 billion new shares.
CyberWorks' shares have lost 70 percent of their value since the company took over HKT on August 17. The stock closed at HK$4.43.
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