HONG KONG-Speculation that Pacific Century CyberWorks’ (PCCW) takeover of Cable & Wireless HKT may be unraveling increased last week, because of the continuing decline in PCCW’s shares, which are nearly 40 percent below their late-February level when the deal was first established.
Both Australia’s News Corp. and Singapore Telecommunications, which was in talks with Cable & Wireless before PCCW stepped in, have been reported to be considering intervening in the takeover.
In February, PCCW offered 1.1 PCCW shares for each C&W HKT share or 0.7116 PCCW shares plus 93 cents per share in cash. But with the Hong Kong Internet company’s shares falling during the recent decline in Internet and high-technology stocks, the deal is less attractive. Before the PCCW offer was made, Cable & Wireless had said it was most interested in a cash offer rather than a stock exchange.
Cable & Wireless owns 54 percent of Cable and Wireless HKT, which is one of six wireless operators in the competitive Hong Kong market.
News Corp. had allied with SingTel for its C&W HKT bid in February, so a partnership for a revived bid between the two is feasible.
