PCCW Down 3.2% on Possible M&A with Troubled Level 3
Nov 26, 2001 - 13:24:51 HKT
quamnet.com
Quamnet News Service
Pacific Century CyberWorks (0008), Richard Li's communications vehicle, ended the morning session down 3.2 percent after newspaper reports said that Reach Ltd., an Internet backbone joint venture between PCCW and Australia's Telstra Corp., may buy assets from Level 3 Communications or merge with the U.S. company.
At midday Hong Kong time, PCCW stock fell 3.2 percent to HK$2.30, with HK$138.49 million shares changing hands.
Level 3, like its rival wholesale international telecoms operators, has been struggling under heavy debt and declining prices resulted from overcapacity in the long-haul fiber-optic network industry. The Colorado-based firm last month posted a net loss for its third quarter of US$437 million and said it would cut 750 jobs, according to Reuters.
Hong Kong Economic Times reported that Reach and Level 3 are in a process of reviewing each other's balance sheets, the paper quoted unnamed sources as reporting. The merger, if materializes, would enable Reach to obtain Level 3's global optic fiber network at a bargaining price, the paper said.
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