HONG KONG-After courting competing bids for several weeks, Cable and Wireless plc accepted a $35.9 billion cash and stock offer for its Hong Kong wireless operator 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 take up of the offer, $6 billion to $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 about 93 cents for each C&W HKT share.
Cable & Wireless also can nominate two directors to PCCW’s board.
PCCW was founded by Richard Li, the 33-year-old son of Li Ka-shing, a well-known Hong Kong businessman. The company is developing a high-speed Internet service.
On Feb. 29, C&W HKT had a market capitalization of $40.4 billion.
Rupert Murdoch’s News Corp.’s last-minute offer to increase SingTel’s bid failed. The Australian company said it would pay $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 wireless operator.
