re: Tidy little profit of US$3.85 billion for Hutchison Whampoa on DT/VSTR deal
<< so VSTR just got sold for $29B >>
Big winner Hutchison Whampoa ... takes money to make money. <g>
<< PCS has about 11 million subs while VSTR has around 4 million >>
5.4 billion with Powertel. Still building out properties bought at reauction and acquired through spectrum swaps, and opening serice in Cincinnati and Dayton, New Orleans, and Louisiana, this year. and California, Nevada and the Carolinas by the end of 2002.
A sleeper, but obviously disadvantaged by technology choice, as the wireless paradigm shifts from voice to data against the formidable Verizon/PCS CDMA powers.
Cool move is a first of its kind reciprocal single international roaming rate across Europe and United States announced to day and beginning Friday.
>> Hutchison Whampoa Gets $5.1 Billion From Disposal of VoiceStream Shares
Asian Wall Street Journal
June 1, 2001
Hutchison Whampoa Ltd. said it received a total consideration of about US$5.1 billion from the sale of its stake in VoiceStream Wireless Corp. to Deutsche Telekom AG.
The exit price from its involvement with VoiceStream totaled about five times its initial investment three years ago.
In 1998 and 1999, Hutchison bought into two companies, which were later merged into VoiceStream, with a total investment of around US$1 billion.
Deutsche Telekom has completed its acquisitions of VoiceStream and Powertel Inc., giving the company its first big U.S. presence. VoiceStream is the largest U.S. provider of mobile-phone services using the GSM, or global system for mobile communications standard that is popular in Europe.
The VoiceStream deal was first announced nearly a year ago. Earlier this month, Deutsche Telekom cleared the final U.S. regulatory hurdle needed to acquire the two companies.
The transactions closed even though VoiceStream could have sought to renegotiate the financial terms, because Deutsche Telekom stock averaged less than 33 euros (US$28.29) for seven days within the 15 trading days before closure.
Deutsche Telekom stock has fallen 75% since last March and has lost more than half its value in the last year.
Hutchison's consideration from the sale of its stake was split into US$885 million cash, or US$15.7262 per VoiceStream share, and approximately 206.6 million shares, or 3.6693 Deutsche Telekom shares per VoiceStream share.
Deutsche Telekom originally offered 3.2 shares plus US$30 cash for each VoiceStream share but sweetened the offer when its shares plummeted.
Hutchison said that based on the closing price and exchange rates Wednesday, the Deutsche Telekom shares it received would have a market value of more than US$4.2 billion.
"Hutchison will book a profit of approximately HK$30 billion [US$3.85 billion] as a result of this transaction," it said.
Shares in Hutchison closed at 84 Hong Kong dollars each on the Hong Kong Stock Exchange, down HK$1.
American depositary receipts of Deutsche Telekom were trading at US$20.98, up 68 cents, at 4 p.m. trading on the New York Stock Exchange.
The proceeds from the sale of its VoiceStream stake are in line with calculations by analysts, and will likely reignite speculation about what the company will do with its war chest -- which stood at more than US$25 billion in cash and marketable securities alone at the end of last year.
Each outstanding common share of Powertel, a regional wireless service provider in the southeastern U.S., was converted into the right to receive 2.6353 shares of Deutsche Telekom.
In total, the German telecommunications company said it issued about 1.12 billion ordinary shares, of which about 265.6 million will be delivered in the form of American depositary receipts that are traded on the New York Stock Exchange.
VoiceStream has said that the deal with Deutsche Telekom would aid its expansion in existing and new markets, as well as speed up the deployment of advanced wireless products and services in the U.S., where it is the sixth-largest wireless company.
Several U.S. lawmakers had said the German government's 44% direct stake in Deutsche Telekom affects competition and the nation's national security. The German government has pledged to eliminate its interest in the company in the coming years. <<
- Eric - |
