PCCW mum on report that it eyeing Japan Telecom
Sun February 9, 2003 01:31 AM ET
HONG KONG, Feb 9 (Reuters) - Hong Kong's telecom giant PCCW Ltd 0008.HK , fresh from failed takeover bid for U.K. carrier, Cable & Wireless CW.L , declined comment on Sunday on a report it was in talks to buy Japan Telecom Holdings Co Ltd 9434.T .
"We do not comment on speculation," a PCCW spokeswoman said, replying to queries about a report it was in discussions to buy Japan Telecom, two-thirds owned by Vodafone Group Plc VOD.L .
Japan's Asahi Shimbun newspaper quoted unidentified sources connected with Japan Telecom on Saturday as saying that PCCW had "surfaced as a strong candidate" in talks to buy Japan's third-largest fixed-line operator.
It said PCCW had first teamed up with U.S. investment fund Ripplewood Holdings, and other foreign-based investors had joined the two later, when negotiations grew more serious in January.
The newspaper said the potential buyers had formed a group, and were continuing discussions with Vodafone, which has been trying to streamline its corporate structure by mopping up European holdings and disposing of Japanese landline assets.
The report comes as PCCW is in damage-control mode over its controversial handling on Thursday of news that it made a preliminary takeover offer for, and was rebuffed by, British telecom carrier Cable & Wireless Plc.
PCCW shares slid 1.65 percent to HK$5.95 on Friday.
Some investors were angry it had initially denied reports of a bid for C&W only to confirm later the same day that it had approached the company. Others questioned if the debt-heavy company was being over-ambitious in eyeing a big takeover bid.
Hong Kong's media and some legislators have since questioned the credibility and standards of corporate governance within PCCW, which is run by Richard Li, the younger son of Asia's wealthiest businessman Li Ka-shing.
They have also piled pressure on local exchange regulators to probe if the company had deliberately misled investors in Hong Kong and violated listing rules.
The younger Li told London's Sunday Times newspaper that PCCW would not launch a hostile bid for C&W but that the two companies could work together to enhance shareholder value.
The Times quoted Li as saying he was planning to try again this week with a two billion pound (US$3.27 billion) bid for C&W.
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