Hong Kong Broadband Network (HKBN) is going head-to-head with a consortium of MBK Partners and TPG Capital as front-runners in a behest for a fixed-line telecommunications business of skill hulk The Wharf (Holdings), according to 3 people with trust of a matter.
Speculation has been abundant that a conglomerate’s Wharf TT operation might fetch a squeeze cost of only over US$1 billion, creation it a latest big-ticket corporate telecommunications merger in Hong Kong given HKT bought CSL New World Mobility for US$2.43 billion in 2014.
The 3 sources pronounced HKBN, a city’s second-largest fixed-line residential broadband operator, had submitted a many assertive bid to acquire Wharf TT, that runs craving broadband, information centre and complement formation services.
Wharf’s divestment plan, that was initial reported by Reuters in June, had also captivated US private equity organisation KKR and mobile network user SmarTone Telecommunications as bidders, a sources said.
Alfred Lau, an researcher during Bocom International, told a South China Morning Post on Monday that he estimated a value of Wharf TT to be “roughly US$500 million”.
“If a Wharf organisation can lift about US$1 billion from a sale, afterwards that would be a certain and outcome in a benefit of US$1 per share,” Lau said.
“That’s not a outrageous amount, though this proceed is in line with Wharf’s devise of divesting non-core resources after locking adult good gratefulness for them.”
When contacted by a Post, KKR, SmarTone, HKBN, TPG and MBK all refused to criticism “on marketplace speculation”.
Stephen Ng Tin-hoi, a authority and handling executive of a Wharf group, final week declined to yield any refurbish on a widely speculated behest process.
“No, not yet,” Ng told a Post on a sidelines of a Wharf skill lecture final Wednesday.
According to sources, Wharf’s proclamation of a bid formula was imminent, following progressing reports that a leader would be famous by Friday this week.
Lau pronounced he was hard-pressed to trust that HKBN could fast pattern a financial resources indispensable to buy Wharf TT.
“Being private-equity firms, KKR and a TPG-MBK organisation would have some-more entrance to financing,” Lau said.
William Yeung Chu-kwong, a arch executive during HKBN, pronounced in Apr that a association was “open to creation another merger if a cost is right”, following a company’s US$650 million money squeeze in Feb of New World Telephone Holdings’ fixed-line broadband network and online selling operations.
That seemed like a rarely flushed opinion from HKBN’s comparison government after their due ubiquitous charge “to issue, distribute and understanding with additional shares not surpassing 20 per cent of a released share collateral of a company” as a approach to fast lift some-more supports was voted down in a check during their annual ubiquitous assembly in December.
San Francisco-based TPG, one of a world’s largest private equity companies, supposing a vital investment in Hong Kong-listed Lenovo Group for a merger of IBM’s personal computing business in 2005.
Seoul-based MBK is a private equity association with a prolonged lane record of investing in Asian telecommunications and pay-TV assets, including in Taiwanese wire TV provider China Network Systems.
Lau pronounced a other widely speculated devise by a Wharf organisation to sell a infancy interest in struggling pay-television user i-Cable Communications “remains a doubt mark”.
“I would be astounded if they gold a understanding to sell both Wharf TT and i-Cable,” he said.
The largest corporate telecommunications buyout in Hong Kong stays a US$38 billion takeover of Cable Wireless HKT in 2000 by Pacific Century CyberWorks, that was aristocrat Richard Li Tzar-kai’s internet investment start-up during a time.
Additional stating by Sarah Zheng