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Li, China Unicom offer $1.9b to take PCCW private

By Wang Xing (China Daily)
Updated: 2008-11-06 09:39

Hong Kong tycoon Richard Li and China Unicom yesterday said they would offer $1.9 billion to take Li's Hong Kong telecommunications company PCCW Ltd private.

Li's Singapore-listed company Pacific Century Regional Development Ltd (PCRD) and China Network Communications Group, now owned by China Unicom following the country's recent telecom restructuring, will offer HK$4.20 ($0.54) a share to buy out the 52 percent of the stocks owned by other investors in PCCW, according to a filling to the Hong Kong Stock Exchange.

The price represents a 53 percent premium on PCCW's last close of HK$2.75 before the shares were suspended from trading on October 14.

PCRD will pay HK$11.1 billion, or 74 percent of the costs of taking the firm private, according to the proposal. China Netcom will be responsible for the remaining bill of HK$3.8 billion, or nearly 26 percent of the total cost.

The buyout plan will fail to proceed if holders of 10 percent of the shares sought by Li and China Network reject it.

PCCW is Hong Kong's dominant fixed-line operator. Li and PCRD control 28 percent of the company, while China Unicom, PCCW's second largest shareholder, has a 19.9 percent stake.

This is the third time in two years that PCCW, whose shares have long performed poorly on the stock market, had tried to sell its core telecom assets.