Top Biz News

HK banker buys 23% of PCCW

By Jonathan Yeung and Zhang Jin (China Daily)
Updated: 2006-07-11 08:31

Analysts said it's a wise move for Li to exit the telecom sector, which is highly competitive and delivers slim profits.

"I think he made the right decision," said Andes Cheng, an analyst with Hong Kong's South China Brokerage Co Ltd.

Leung said he would team up with China Netcom to explore the mainland market. When he was with Citigroup in 2004, Leung handled the listing of China Netcom Group's Hong Kong arm.

Li said he would personally earmark HK$1.38 billion (US$177 million) to minority PCCW shareholders as special dividend, translating into HK$0.33-HK$0.38 (4.2-4.9 US cents) per share, a move analysts said would be part of the reason why PCCW shares would rise after they resume trading today.

 "It's not the 100 per cent outcome that I had hoped for, but this is the best we can do," Li told a press briefing. He declined to take questions.

PCCW shares increased about 10 per cent till Friday after Macquarie Bank's offer was made public on June 20. Texas Pacific joined the bid a few days later.

Opposition to Texas Pacific and Macquarie, Australia's largest investment bank, highlights China's sensitivity towards overseas ownership of industries the government views as strategic, said some analysts.

"Communication is considered a very strategic asset," said Francis Lun, general manager at Fulbright Securities Ltd.

Bloomberg contributed to the story