HONG KONG-After courting competing bids for several weeks, Cable and Wireless plc accepted a US$35.9 billion cash and stock offer for its Hong Kong wireless operation from Pacific Century CyberWorks Ltd. The deal is one of the largest ever in Asia.
The agreement beat a rival bid from Singapore Telecommunications.
Cable & Wireless said it will receive, depending on the takeup of the offer, US$6 billion to US$11.2 billion and shares in PCCW worth 11.2 percent to 20.9 percent of the Internet start-up’s fully issued share capital after completion of the offer. The British multinational plans to sell 4 percent of PCCW’s shares following completion of the offer.
Cable & Wireless holds 54 percent of Cable & Wireless HKT, one of six wireless operators in Hong Kong’s competitive mobile market.
The PCCW offer provides two alternatives to C&W HKT shareholders. A share alternative allows each C&W HKT shareholder to receive 1.1 shares of PCCW for each C&W HKT share. The cash and share offer allows each C&W HKT shareholder to receive 0.7116 PCCW shares and US$0.929 for each C&W HKT share.
The board of directors of Cable & Wireless HKT said it will appoint an independent committee of the board to consider the terms of the offer. The committee will report its view to the board.
“The board wishes to emphasize that it has not had sufficient time to evaluate the offer and is not yet in a position to make any recommendation with respect to the offer,” Cable & Wireless HKT said.
PCCW was founded by Richard Li, 33-year-old son of Li Ka-shing, a well-known Hong Kong businessman. The company is developing a high-speed Internet service.
A last-minute offer to increase SingTel’s bid by Rupert Murdoch’s News Corp. failed. The Australian company said it would pay US$1 billion for a 4-percent stake in SingTel, allowing the government-controlled telecom company to increase its bid for C&W HKT.
SingTel operates SingTel Mobile, Singapore’s largest mobile operator.
