HONG KONG-Pacific Century CyberWorks, the Asian Internet company vying for a tie-up with Cable & Wireless HKT, raised more than $1 billion through a share placement. The funds could help PCCW’s possible bid for Cable & Wireless HKT and thwart a partnership between HKT and Singapore Telecom, which have been discussing a merger since January.
However, a three-way partnership among SingTel, PCCW and Cable & Wireless HKT also is a possibility, according to international press reports. Cable and Wireless plc is thought to be interested in cash for its sale of HKT, one of Hong Kong’s six wireless operators. However, analysts believe PCCW would make an offer that is largely on paper. SingTel signaled it is open to a third party in its bid for HKT, said the reports.
In addition, SingTel is under political pressure to limit its stake in HKT to 35 percent. SingTel is controlled by Temasek, the Singapore government’s investment company. Although Hong Kong has no foreign telecom investment restrictions, political concerns exist about the Singapore government owning too large a stake in Hong Kong’s dominant telecommunications company.
Last month, Cable & Wireless said it is in discussions regarding a proposed merger between its Hong Kong mobile phone arm and SingTel.
Cable & Wireless owns 54 percent of Cable & Wireless HKT, and SingTel operates SingTel Mobile, Singapore’s largest wireless operator. PCCW is a Hong Kong-based Internet company run by Richard Li, the son of Li Ka-Shing, a Hong Kong real estate billionaire.
